Correlation Between FAT Brands and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both FAT Brands 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 FAT Brands and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAT Brands and Cracker Barrel Old, you can compare the effects of market volatilities on FAT Brands 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 FAT Brands with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAT Brands and Cracker Barrel.
Diversification Opportunities for FAT Brands and Cracker Barrel
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between FAT and Cracker is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding FAT Brands 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 FAT Brands 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 FAT Brands 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 FAT Brands i.e., FAT Brands and Cracker Barrel go up and down completely randomly.
Pair Corralation between FAT Brands and Cracker Barrel
Assuming the 90 days horizon FAT Brands is expected to under-perform the Cracker Barrel. In addition to that, FAT Brands is 1.28 times more volatile than Cracker Barrel Old. It trades about -0.01 of its total potential returns per unit of risk. Cracker Barrel Old is currently generating about 0.21 per unit of volatility. If you would invest 4,506 in Cracker Barrel Old on September 13, 2024 and sell it today you would earn a total of 659.00 from holding Cracker Barrel Old or generate 14.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
FAT Brands vs. Cracker Barrel Old
Performance |
| Timeline |
| FAT Brands |
| Cracker Barrel Old |
FAT Brands and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAT Brands and Cracker Barrel
The main advantage of trading using opposite FAT Brands and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAT Brands 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.| FAT Brands vs. FAT Brands | FAT Brands vs. Brinker International | FAT Brands vs. Jack In The | FAT Brands vs. Potbelly Co |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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