Correlation Between Cracker Barrel and Globalfoundries
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and Globalfoundries 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 Globalfoundries 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 Globalfoundries, you can compare the effects of market volatilities on Cracker Barrel and Globalfoundries 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 Globalfoundries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and Globalfoundries.
Diversification Opportunities for Cracker Barrel and Globalfoundries
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cracker and Globalfoundries is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries 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 Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and Globalfoundries go up and down completely randomly.
Pair Corralation between Cracker Barrel and Globalfoundries
Given the investment horizon of 90 days Cracker Barrel is expected to generate 1.12 times less return on investment than Globalfoundries. But when comparing it to its historical volatility, Cracker Barrel Old is 1.41 times less risky than Globalfoundries. It trades about 0.28 of its potential returns per unit of risk. Globalfoundries is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,601 in Globalfoundries on September 5, 2024 and sell it today you would earn a total of 837.00 from holding Globalfoundries or generate 23.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cracker Barrel Old vs. Globalfoundries
Performance |
| Timeline |
| Cracker Barrel Old |
| Globalfoundries |
Cracker Barrel and Globalfoundries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and Globalfoundries
The main advantage of trading using opposite Cracker Barrel and Globalfoundries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, Globalfoundries 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 Globalfoundries will offset losses from the drop in Globalfoundries' 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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