Correlation Between Cracker Barrel and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel and Chipotle Mexican 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 Cracker Barrel and Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cracker Barrel Old and Chipotle Mexican Grill, you can compare the effects of market volatilities on Cracker Barrel and Chipotle Mexican 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 Cracker Barrel with a short position of Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and Chipotle Mexican.
Diversification Opportunities for Cracker Barrel and Chipotle Mexican
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cracker and Chipotle is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old and Chipotle Mexican Grill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chipotle Mexican Grill and Cracker Barrel 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 Cracker Barrel Old are associated (or correlated) with Chipotle Mexican. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chipotle Mexican Grill has no effect on the direction of Cracker Barrel i.e., Cracker Barrel and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Cracker Barrel and Chipotle Mexican
Given the investment horizon of 90 days Cracker Barrel Old is expected to under-perform the Chipotle Mexican. In addition to that, Cracker Barrel is 3.39 times more volatile than Chipotle Mexican Grill. It trades about -0.13 of its total potential returns per unit of risk. Chipotle Mexican Grill is currently generating about -0.04 per unit of volatility. If you would invest 295,553 in Chipotle Mexican Grill on January 26, 2024 and sell it today you would lose (2,877) from holding Chipotle Mexican Grill or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cracker Barrel Old vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Cracker Barrel Old |
| Chipotle Mexican Grill |
Cracker Barrel and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and Chipotle Mexican
The main advantage of trading using opposite Cracker Barrel and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel position performs unexpectedly, Chipotle Mexican 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 Chipotle Mexican will offset losses from the drop in Chipotle Mexican's long position.| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel vs. Papa Johns International |
| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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