Correlation Between Cracker Barrel and China Tontine
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and China Tontine 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 China Tontine 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 China Tontine Wines, you can compare the effects of market volatilities on Cracker Barrel and China Tontine 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 China Tontine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and China Tontine.
Diversification Opportunities for Cracker Barrel and China Tontine
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cracker and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and China Tontine Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Tontine Wines 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 China Tontine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Tontine Wines has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and China Tontine go up and down completely randomly.
Pair Corralation between Cracker Barrel and China Tontine
Given the investment horizon of 90 days Cracker Barrel Old is expected to under-perform the China Tontine. But the stock apears to be less risky and, when comparing its historical volatility, Cracker Barrel Old is 38.17 times less risky than China Tontine. The stock trades about -0.03 of its potential returns per unit of risk. The China Tontine Wines is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.20 in China Tontine Wines on August 30, 2024 and sell it today you would earn a total of 6.90 from holding China Tontine Wines or generate 3450.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Cracker Barrel Old vs. China Tontine Wines
Performance |
| Timeline |
| Cracker Barrel Old |
| China Tontine Wines |
Cracker Barrel and China Tontine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and China Tontine
The main advantage of trading using opposite Cracker Barrel and China Tontine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, China Tontine 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 China Tontine will offset losses from the drop in China Tontine's long position.| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel vs. Papa Johns International |
| China Tontine vs. Aristocrat Group Corp | China Tontine vs. Naked Wines plc | China Tontine vs. Willamette Valley Vineyards | China Tontine vs. Andrew Peller Limited |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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