Correlation Between BJs Restaurants and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants 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 BJs Restaurants and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Cracker Barrel Old, you can compare the effects of market volatilities on BJs Restaurants 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 BJs Restaurants with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Cracker Barrel.
Diversification Opportunities for BJs Restaurants and Cracker Barrel
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BJs and Cracker is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants 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 BJs Restaurants 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 BJs Restaurants 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 BJs Restaurants i.e., BJs Restaurants and Cracker Barrel go up and down completely randomly.
Pair Corralation between BJs Restaurants and Cracker Barrel
Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.84 times more return on investment than Cracker Barrel. However, BJs Restaurants is 1.19 times less risky than Cracker Barrel. It trades about 0.04 of its potential returns per unit of risk. Cracker Barrel Old is currently generating about -0.01 per unit of risk. If you would invest 3,072 in BJs Restaurants on March 17, 2025 and sell it today you would earn a total of 1,252 from holding BJs Restaurants or generate 40.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Cracker Barrel Old
Performance |
| Timeline |
| BJs Restaurants |
| Cracker Barrel Old |
BJs Restaurants and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Cracker Barrel
The main advantage of trading using opposite BJs Restaurants and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants 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.| BJs Restaurants vs. Dine Brands Global | BJs Restaurants vs. Brinker International | BJs Restaurants vs. Bloomin Brands | BJs Restaurants vs. The Cheesecake Factory |
| 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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