Correlation Between Verra Mobility and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Verra Mobility 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 Verra Mobility and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verra Mobility Corp and Cracker Barrel Old, you can compare the effects of market volatilities on Verra Mobility 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 Verra Mobility with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verra Mobility and Cracker Barrel.
Diversification Opportunities for Verra Mobility and Cracker Barrel
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Verra and Cracker is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Verra Mobility 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 Verra Mobility 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 Verra Mobility 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 Verra Mobility i.e., Verra Mobility and Cracker Barrel go up and down completely randomly.
Pair Corralation between Verra Mobility and Cracker Barrel
Given the investment horizon of 90 days Verra Mobility Corp is expected to generate 0.6 times more return on investment than Cracker Barrel. However, Verra Mobility Corp is 1.68 times less risky than Cracker Barrel. It trades about 0.05 of its potential returns per unit of risk. Cracker Barrel Old is currently generating about -0.03 per unit of risk. If you would invest 1,877 in Verra Mobility Corp on September 1, 2024 and sell it today you would earn a total of 489.00 from holding Verra Mobility Corp or generate 26.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verra Mobility Corp vs. Cracker Barrel Old
Performance |
| Timeline |
| Verra Mobility Corp |
| Cracker Barrel Old |
Verra Mobility and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verra Mobility and Cracker Barrel
The main advantage of trading using opposite Verra Mobility and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verra Mobility 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.The idea behind Verra Mobility Corp and Cracker Barrel Old pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cracker Barrel vs. Yum Brands | Cracker Barrel vs. The Wendys Co | Cracker Barrel vs. Wingstop | Cracker Barrel vs. Shake Shack |
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 CEOs Directory module to screen CEOs from public companies around the world.
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