Correlation Between Cracker Barrel and Assurant
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and Assurant at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cracker Barrel and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cracker Barrel Old and Assurant, you can compare the effects of market volatilities on Cracker Barrel and Assurant and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cracker Barrel with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and Assurant.
Diversification Opportunities for Cracker Barrel and Assurant
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cracker and Assurant is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Cracker Barrel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cracker Barrel Old are associated (or correlated) with Assurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assurant has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and Assurant go up and down completely randomly.
Pair Corralation between Cracker Barrel and Assurant
Given the investment horizon of 90 days Cracker Barrel Old is expected to under-perform the Assurant. In addition to that, Cracker Barrel is 1.76 times more volatile than Assurant. It trades about -0.02 of its total potential returns per unit of risk. Assurant is currently generating about 0.08 per unit of volatility. If you would invest 12,787 in Assurant on September 2, 2024 and sell it today you would earn a total of 9,923 from holding Assurant or generate 77.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cracker Barrel Old vs. Assurant
Performance |
| Timeline |
| Cracker Barrel Old |
| Assurant |
Cracker Barrel and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and Assurant
The main advantage of trading using opposite Cracker Barrel and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, Assurant can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Assurant will offset losses from the drop in Assurant's long position.| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel vs. Papa Johns International |
| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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