Correlation Between Cracker Barrel and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and NYSE Composite 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 NYSE Composite 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 NYSE Composite, you can compare the effects of market volatilities on Cracker Barrel and NYSE Composite 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 NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and NYSE Composite.
Diversification Opportunities for Cracker Barrel and NYSE Composite
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cracker and NYSE is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite 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 NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and NYSE Composite go up and down completely randomly.
Pair Corralation between Cracker Barrel and NYSE Composite
Given the investment horizon of 90 days Cracker Barrel Old is expected to under-perform the NYSE Composite. In addition to that, Cracker Barrel is 4.19 times more volatile than NYSE Composite. It trades about -0.04 of its total potential returns per unit of risk. NYSE Composite is currently generating about 0.1 per unit of volatility. If you would invest 1,499,464 in NYSE Composite on September 19, 2024 and sell it today you would earn a total of 452,297 from holding NYSE Composite or generate 30.16% 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. NYSE Composite
Performance |
| Timeline |
Cracker Barrel and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Cracker Barrel Old
Pair trading matchups for Cracker Barrel
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Cracker Barrel and NYSE Composite
The main advantage of trading using opposite Cracker Barrel and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel vs. Papa Johns International |
| NYSE Composite vs. Chipotle Mexican Grill | NYSE Composite vs. Cracker Barrel Old | NYSE Composite vs. Shake Shack | NYSE Composite vs. Integral Ad Science |
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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