Correlation Between Cracker Barrel and Nuvalent
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and Nuvalent 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 Nuvalent 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 Nuvalent, you can compare the effects of market volatilities on Cracker Barrel and Nuvalent 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 Nuvalent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and Nuvalent.
Diversification Opportunities for Cracker Barrel and Nuvalent
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cracker and Nuvalent is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and Nuvalent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvalent 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 Nuvalent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvalent has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and Nuvalent go up and down completely randomly.
Pair Corralation between Cracker Barrel and Nuvalent
Given the investment horizon of 90 days Cracker Barrel Old is expected to under-perform the Nuvalent. But the stock apears to be less risky and, when comparing its historical volatility, Cracker Barrel Old is 1.22 times less risky than Nuvalent. The stock trades about -0.05 of its potential returns per unit of risk. The Nuvalent is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,574 in Nuvalent on November 27, 2024 and sell it today you would earn a total of 5,229 from holding Nuvalent or generate 203.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cracker Barrel Old vs. Nuvalent
Performance |
| Timeline |
| Cracker Barrel Old |
| Nuvalent |
Cracker Barrel and Nuvalent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and Nuvalent
The main advantage of trading using opposite Cracker Barrel and Nuvalent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, Nuvalent 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 Nuvalent will offset losses from the drop in Nuvalent'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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