Correlation Between Cracker Barrel and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and Advanced Micro 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 Advanced Micro 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 Advanced Micro Devices, you can compare the effects of market volatilities on Cracker Barrel and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and Advanced Micro.
Diversification Opportunities for Cracker Barrel and Advanced Micro
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cracker and Advanced is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and Advanced Micro go up and down completely randomly.
Pair Corralation between Cracker Barrel and Advanced Micro
Given the investment horizon of 90 days Cracker Barrel Old is expected to generate 1.75 times more return on investment than Advanced Micro. However, Cracker Barrel is 1.75 times more volatile than Advanced Micro Devices. It trades about 0.28 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.06 per unit of risk. If you would invest 4,585 in Cracker Barrel Old on September 5, 2024 and sell it today you would earn a total of 986.00 from holding Cracker Barrel Old or generate 21.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cracker Barrel Old vs. Advanced Micro Devices
Performance |
| Timeline |
| Cracker Barrel Old |
| Advanced Micro Devices |
Cracker Barrel and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and Advanced Micro
The main advantage of trading using opposite Cracker Barrel and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel vs. Papa Johns International |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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