Correlation Between Cracker Barrel and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and Harmony Gold 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 Harmony Gold 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 Harmony Gold Mining, you can compare the effects of market volatilities on Cracker Barrel and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and Harmony Gold.
Diversification Opportunities for Cracker Barrel and Harmony Gold
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cracker and Harmony is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and Harmony Gold go up and down completely randomly.
Pair Corralation between Cracker Barrel and Harmony Gold
Given the investment horizon of 90 days Cracker Barrel Old is expected to generate 1.15 times more return on investment than Harmony Gold. However, Cracker Barrel is 1.15 times more volatile than Harmony Gold Mining. It trades about 0.24 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.22 per unit of risk. If you would invest 5,468 in Cracker Barrel Old on November 3, 2024 and sell it today you would earn a total of 1,018 from holding Cracker Barrel Old or generate 18.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cracker Barrel Old vs. Harmony Gold Mining
Performance |
| Timeline |
| Cracker Barrel Old |
| Harmony Gold Mining |
Cracker Barrel and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and Harmony Gold
The main advantage of trading using opposite Cracker Barrel and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold'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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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