Correlation Between Coupang LLC and Cracker Barrel

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Can any of the company-specific risk be diversified away by investing in both Coupang LLC 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 Coupang LLC and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and Cracker Barrel Old, you can compare the effects of market volatilities on Coupang LLC 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 Coupang LLC with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and Cracker Barrel.

Diversification Opportunities for Coupang LLC and Cracker Barrel

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Coupang and Cracker is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC 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 Coupang LLC 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 Coupang LLC 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 Coupang LLC i.e., Coupang LLC and Cracker Barrel go up and down completely randomly.

Pair Corralation between Coupang LLC and Cracker Barrel

Given the investment horizon of 90 days Coupang LLC is expected to generate 0.89 times more return on investment than Cracker Barrel. However, Coupang LLC is 1.12 times less risky than Cracker Barrel. It trades about 0.04 of its potential returns per unit of risk. Cracker Barrel Old is currently generating about -0.02 per unit of risk. If you would invest  1,787  in Coupang LLC on August 31, 2024 and sell it today you would earn a total of  760.00  from holding Coupang LLC or generate 42.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.79%
ValuesDaily Returns

Coupang LLC  vs.  Cracker Barrel Old

 Performance 
       Timeline  
Coupang LLC 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Coupang LLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Coupang LLC reported solid returns over the last few months and may actually be approaching a breakup point.
Cracker Barrel Old 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Cracker Barrel Old are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Cracker Barrel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Coupang LLC and Cracker Barrel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coupang LLC and Cracker Barrel

The main advantage of trading using opposite Coupang LLC and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC 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.
The idea behind Coupang LLC and Cracker Barrel Old pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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