Correlation Between Cracker Barrel and Bloomin Brands
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and Bloomin Brands 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 Bloomin Brands 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 Bloomin Brands, you can compare the effects of market volatilities on Cracker Barrel and Bloomin Brands 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 Bloomin Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and Bloomin Brands.
Diversification Opportunities for Cracker Barrel and Bloomin Brands
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cracker and Bloomin is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and Bloomin Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomin Brands 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 Bloomin Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomin Brands has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and Bloomin Brands go up and down completely randomly.
Pair Corralation between Cracker Barrel and Bloomin Brands
Given the investment horizon of 90 days Cracker Barrel Old is expected to generate 1.18 times more return on investment than Bloomin Brands. However, Cracker Barrel is 1.18 times more volatile than Bloomin Brands. It trades about -0.02 of its potential returns per unit of risk. Bloomin Brands is currently generating about -0.07 per unit of risk. If you would invest 6,387 in Cracker Barrel Old on August 26, 2024 and sell it today you would lose (1,546) from holding Cracker Barrel Old or give up 24.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cracker Barrel Old vs. Bloomin Brands
Performance |
| Timeline |
| Cracker Barrel Old |
| Bloomin Brands |
Cracker Barrel and Bloomin Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and Bloomin Brands
The main advantage of trading using opposite Cracker Barrel and Bloomin Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, Bloomin Brands 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 Bloomin Brands will offset losses from the drop in Bloomin Brands' long position.| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel vs. Papa Johns International |
| Bloomin Brands vs. Dine Brands Global | Bloomin Brands vs. BJs Restaurants | Bloomin Brands vs. The Cheesecake Factory | Bloomin Brands vs. Brinker International |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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