Correlation Between CIMG and Cracker Barrel

Can any of the company-specific risk be diversified away by investing in both CIMG 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 CIMG and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CIMG Inc and Cracker Barrel Old, you can compare the effects of market volatilities on CIMG 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 CIMG with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMG and Cracker Barrel.

Diversification Opportunities for CIMG and Cracker Barrel

-0.11

Correlation Coefficient

CIMG  Cracker Barrel

Good diversification

The 3 months correlation between CIMG and Cracker is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CIMG 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 CIMG 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 CIMG 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 CIMG i.e., CIMG and Cracker Barrel go up and down completely randomly.

Pair Corralation between CIMG and Cracker Barrel

Considering the 90-day investment horizon CIMG Inc is expected to generate 22.03 times more return on investment than Cracker Barrel. However, CIMG is 22.03 times more volatile than Cracker Barrel Old. It trades about 0.09 of its potential returns per unit of risk. Cracker Barrel Old is currently generating about 0.19 per unit of risk. If you would invest  127.00  in CIMG Inc on September 3, 2024 and sell it today you would lose (42.00) from holding CIMG Inc or give up 33.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CIMG Inc  vs.  Cracker Barrel Old

CIMG Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CIMG Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal primary indicators, CIMG reported solid returns over the last few months and may actually be approaching a breakup point.

Cracker Barrel Old

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cracker Barrel Old are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Cracker Barrel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CIMG and Cracker Barrel

The main advantage of trading using opposite CIMG and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIMG 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 CIMG Inc 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.