Correlation Between Grillit and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Grillit 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 Grillit and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grillit and Cracker Barrel Old, you can compare the effects of market volatilities on Grillit 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 Grillit with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grillit and Cracker Barrel.
Diversification Opportunities for Grillit and Cracker Barrel
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grillit and Cracker is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Grillit 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 Grillit 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 Grillit 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 Grillit i.e., Grillit and Cracker Barrel go up and down completely randomly.
Pair Corralation between Grillit and Cracker Barrel
Given the investment horizon of 90 days Grillit is expected to generate 7.73 times more return on investment than Cracker Barrel. However, Grillit is 7.73 times more volatile than Cracker Barrel Old. It trades about 0.14 of its potential returns per unit of risk. Cracker Barrel Old is currently generating about 0.1 per unit of risk. If you would invest 0.03 in Grillit on August 28, 2024 and sell it today you would earn a total of 0.02 from holding Grillit or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Grillit vs. Cracker Barrel Old
Performance |
| Timeline |
| Grillit |
| Cracker Barrel Old |
Grillit and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grillit and Cracker Barrel
The main advantage of trading using opposite Grillit and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grillit 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.| Grillit vs. ZA Group | Grillit vs. Blue Water Global | Grillit vs. McDonalds | Grillit vs. Brinker International |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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