Correlation Between Citizens and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Citizens and Cracker Barrel 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 Citizens and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and Cracker Barrel Old, you can compare the effects of market volatilities on Citizens and Cracker Barrel 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 Citizens with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Cracker Barrel.
Diversification Opportunities for Citizens and Cracker Barrel
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citizens and Cracker is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Cracker Barrel Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cracker Barrel Old and Citizens 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 Citizens are associated (or correlated) with Cracker Barrel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cracker Barrel Old has no effect on the direction of Citizens i.e., Citizens and Cracker Barrel go up and down completely randomly.
Pair Corralation between Citizens and Cracker Barrel
Considering the 90-day investment horizon Citizens is expected to under-perform the Cracker Barrel. In addition to that, Citizens is 1.01 times more volatile than Cracker Barrel Old. It trades about -0.08 of its total potential returns per unit of risk. Cracker Barrel Old is currently generating about 0.1 per unit of volatility. If you would invest 4,951 in Cracker Barrel Old on August 31, 2024 and sell it today you would earn a total of 325.00 from holding Cracker Barrel Old or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens vs. Cracker Barrel Old
Performance |
| Timeline |
| Citizens |
| Cracker Barrel Old |
Citizens and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and Cracker Barrel
The main advantage of trading using opposite Citizens and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens position performs unexpectedly, Cracker Barrel 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 Cracker Barrel will offset losses from the drop in Cracker Barrel's long position.| Citizens vs. Lincoln National | Citizens vs. Aflac Incorporated | Citizens vs. Unum Group | Citizens vs. Manulife Financial Corp |
| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel vs. Papa Johns International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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