Correlation Between GameStop Corp and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both GameStop Corp 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 GameStop Corp and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Cracker Barrel Old, you can compare the effects of market volatilities on GameStop Corp 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 GameStop Corp with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Cracker Barrel.
Diversification Opportunities for GameStop Corp and Cracker Barrel
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GameStop and Cracker is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp 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 GameStop Corp 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 GameStop Corp 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 GameStop Corp i.e., GameStop Corp and Cracker Barrel go up and down completely randomly.
Pair Corralation between GameStop Corp and Cracker Barrel
Considering the 90-day investment horizon GameStop Corp is expected to generate 3.33 times more return on investment than Cracker Barrel. However, GameStop Corp is 3.33 times more volatile than Cracker Barrel Old. It trades about 0.08 of its potential returns per unit of risk. Cracker Barrel Old is currently generating about -0.01 per unit of risk. If you would invest 1,500 in GameStop Corp on September 1, 2024 and sell it today you would earn a total of 1,405 from holding GameStop Corp or generate 93.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. Cracker Barrel Old
Performance |
| Timeline |
| GameStop Corp |
| Cracker Barrel Old |
GameStop Corp and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Cracker Barrel
The main advantage of trading using opposite GameStop Corp and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp 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.| GameStop Corp vs. RH | GameStop Corp vs. Dicks Sporting Goods | GameStop Corp vs. Best Buy Co | GameStop Corp vs. AutoZone |
| Cracker Barrel vs. The Wendys Co | Cracker Barrel vs. Shake Shack | Cracker Barrel vs. Papa Johns International | Cracker Barrel 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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