Referring to the graphical figure generated in the excel spreadsheet, we notice that there is not much variability in the stock price of the company. However, it was only since the month of October we noticed the stock prices moving up, but overall there was not any significant volatility in the stock prices of the company.
Our analysis were validated through the calculation of standard deviation and the beta function generated using the regression function of the excel. While the standard deviation of the stock prices was calculated to be only 5.95% while the regression results provided us with the beta measure of 0.002 indicating that the stock prices of the company are not very much responsive to the movements in the market index(DJIA). In other words, Beta of 0.002 means that the stock prices are extremely less responsive to the change in the market.
In addition to the above discussion, we can witness that the regression results provided us with the R-Square multiple of 0.0314 only indicating that the stock contains only 3.41% of the market risk, while the remaining risk is only unsystematic risk. Hence, the investor will not be rewarded for including this stock in his portfolio as the majority portion of the risk is diversifiable.
Works Cited
Cracker Barrel Old Country Store, Inc. (CBRL) -NasdaqGS. (n.d.). Retrieved November 13, 2014, from Yahoo Finance: https://in.finance.yahoo.com/q/hp?s=CBRL&a=10&b=1&c=2013&d=10&e=13&f=2014&g=d
Dow Jones Industrial Average (^DJI) -DJI. (n.d.). Retrieved November 13, 2014, from Yahoo Finance: https://in.finance.yahoo.com/q/hp?s=%5EDJI&a=10&b=1&c=2013&d=10&e=13&f=2014&g=d&z=66&y=0
