Correlation Between Portillos and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Portillos 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 Portillos and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Portillos and Cracker Barrel Old, you can compare the effects of market volatilities on Portillos 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 Portillos with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Portillos and Cracker Barrel.
Diversification Opportunities for Portillos and Cracker Barrel
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Portillos and Cracker is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Portillos 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 Portillos 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 Portillos 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 Portillos i.e., Portillos and Cracker Barrel go up and down completely randomly.
Pair Corralation between Portillos and Cracker Barrel
Given the investment horizon of 90 days Portillos is expected to under-perform the Cracker Barrel. But the stock apears to be less risky and, when comparing its historical volatility, Portillos is 1.03 times less risky than Cracker Barrel. The stock trades about -0.05 of its potential returns per unit of risk. The Cracker Barrel Old is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 8,775 in Cracker Barrel Old on August 31, 2024 and sell it today you would lose (3,219) from holding Cracker Barrel Old or give up 36.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Portillos vs. Cracker Barrel Old
Performance |
| Timeline |
| Portillos |
| Cracker Barrel Old |
Portillos and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Portillos and Cracker Barrel
The main advantage of trading using opposite Portillos and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Portillos 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.| Portillos vs. RLJ Lodging Trust | Portillos vs. Aquagold International | Portillos vs. Stepstone Group | Portillos vs. Morningstar Unconstrained Allocation |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |