Correlation Between Ihuman and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Ihuman 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 Ihuman and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ihuman Inc and Cracker Barrel Old, you can compare the effects of market volatilities on Ihuman 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 Ihuman with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and Cracker Barrel.
Diversification Opportunities for Ihuman and Cracker Barrel
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ihuman and Cracker is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc 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 Ihuman 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 Ihuman Inc 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 Ihuman i.e., Ihuman and Cracker Barrel go up and down completely randomly.
Pair Corralation between Ihuman and Cracker Barrel
Allowing for the 90-day total investment horizon Ihuman Inc is expected to under-perform the Cracker Barrel. But the stock apears to be less risky and, when comparing its historical volatility, Ihuman Inc is 1.53 times less risky than Cracker Barrel. The stock trades about -0.14 of its potential returns per unit of risk. The Cracker Barrel Old is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,757 in Cracker Barrel Old on September 1, 2024 and sell it today you would earn a total of 799.00 from holding Cracker Barrel Old or generate 16.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ihuman Inc vs. Cracker Barrel Old
Performance |
| Timeline |
| Ihuman Inc |
| Cracker Barrel Old |
Ihuman and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ihuman and Cracker Barrel
The main advantage of trading using opposite Ihuman and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman 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.| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
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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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