Correlation Between Cracker Barrel and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and Planet Fitness 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 Planet Fitness 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 Planet Fitness, you can compare the effects of market volatilities on Cracker Barrel and Planet Fitness 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 Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and Planet Fitness.
Diversification Opportunities for Cracker Barrel and Planet Fitness
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cracker and Planet is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness 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 Planet Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Fitness has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and Planet Fitness go up and down completely randomly.
Pair Corralation between Cracker Barrel and Planet Fitness
Given the investment horizon of 90 days Cracker Barrel is expected to generate 217.82 times less return on investment than Planet Fitness. In addition to that, Cracker Barrel is 1.53 times more volatile than Planet Fitness. It trades about 0.0 of its total potential returns per unit of risk. Planet Fitness is currently generating about 0.12 per unit of volatility. If you would invest 5,517 in Planet Fitness on September 1, 2024 and sell it today you would earn a total of 4,438 from holding Planet Fitness or generate 80.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cracker Barrel Old vs. Planet Fitness
Performance |
| Timeline |
| Cracker Barrel Old |
| Planet Fitness |
Cracker Barrel and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and Planet Fitness
The main advantage of trading using opposite Cracker Barrel and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, Planet Fitness 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 Planet Fitness will offset losses from the drop in Planet Fitness' long position.| Cracker Barrel vs. The Wendys Co | Cracker Barrel vs. Shake Shack | Cracker Barrel vs. Papa Johns International | Cracker Barrel vs. Darden Restaurants |
| Planet Fitness vs. The Wendys Co | Planet Fitness vs. Shake Shack | Planet Fitness vs. Papa Johns International | Planet Fitness vs. Darden Restaurants |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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