Correlation Between Cracker Barrel and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and PennantPark Floating 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 PennantPark Floating 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 PennantPark Floating Rate, you can compare the effects of market volatilities on Cracker Barrel and PennantPark Floating 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 PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and PennantPark Floating.
Diversification Opportunities for Cracker Barrel and PennantPark Floating
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cracker and PennantPark is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate 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 PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and PennantPark Floating go up and down completely randomly.
Pair Corralation between Cracker Barrel and PennantPark Floating
Given the investment horizon of 90 days Cracker Barrel Old is expected to under-perform the PennantPark Floating. In addition to that, Cracker Barrel is 2.86 times more volatile than PennantPark Floating Rate. It trades about -0.05 of its total potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.07 per unit of volatility. If you would invest 809.00 in PennantPark Floating Rate on December 4, 2024 and sell it today you would earn a total of 304.00 from holding PennantPark Floating Rate or generate 37.58% 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. PennantPark Floating Rate
Performance |
| Timeline |
| Cracker Barrel Old |
| PennantPark Floating Rate |
Cracker Barrel and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and PennantPark Floating
The main advantage of trading using opposite Cracker Barrel and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating's long position.| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel vs. Papa Johns International |
| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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