Correlation Between Cracker Barrel and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and Boyd Gaming 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 Boyd Gaming 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 Boyd Gaming, you can compare the effects of market volatilities on Cracker Barrel and Boyd Gaming 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 Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and Boyd Gaming.
Diversification Opportunities for Cracker Barrel and Boyd Gaming
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cracker and Boyd is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming 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 Boyd Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyd Gaming has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and Boyd Gaming go up and down completely randomly.
Pair Corralation between Cracker Barrel and Boyd Gaming
Given the investment horizon of 90 days Cracker Barrel Old is expected to under-perform the Boyd Gaming. In addition to that, Cracker Barrel is 1.65 times more volatile than Boyd Gaming. It trades about -0.01 of its total potential returns per unit of risk. Boyd Gaming is currently generating about 0.05 per unit of volatility. If you would invest 6,294 in Boyd Gaming on September 1, 2024 and sell it today you would earn a total of 1,091 from holding Boyd Gaming or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cracker Barrel Old vs. Boyd Gaming
Performance |
| Timeline |
| Cracker Barrel Old |
| Boyd Gaming |
Cracker Barrel and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and Boyd Gaming
The main advantage of trading using opposite Cracker Barrel and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, Boyd Gaming 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 Boyd Gaming will offset losses from the drop in Boyd Gaming's long position.| Cracker Barrel vs. The Wendys Co | Cracker Barrel vs. Shake Shack | Cracker Barrel vs. Papa Johns International | Cracker Barrel vs. Darden Restaurants |
| Boyd Gaming vs. MGM Resorts International | Boyd Gaming vs. Las Vegas Sands | Boyd Gaming vs. Wynn Resorts Limited | Boyd Gaming vs. Penn National Gaming |
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 CEOs Directory module to screen CEOs from public companies around the world.
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