Correlation Between Bright Horizons and Boot Barn

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

By analyzing existing cross correlation between Bright Horizons Family and Boot Barn Holdings, you can compare the effects of market volatilities on Bright Horizons and Boot Barn 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 Bright Horizons with a short position of Boot Barn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Horizons and Boot Barn.

Diversification Opportunities for Bright Horizons and Boot Barn

-0.14

Correlation Coefficient

Bright Horizons  Boot Barn

Good diversification

The 3 months correlation between Bright and Boot is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bright Horizons Family and Boot Barn Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boot Barn Holdings and Bright Horizons 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 Bright Horizons Family are associated (or correlated) with Boot Barn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boot Barn Holdings has no effect on the direction of Bright Horizons i.e., Bright Horizons and Boot Barn go up and down completely randomly.

Pair Corralation between Bright Horizons and Boot Barn

Given the investment horizon of 90 days Bright Horizons Family is expected to under-perform the Boot Barn. In addition to that, Bright Horizons is 1.1 times more volatile than Boot Barn Holdings. It trades about -0.05 of its total potential returns per unit of risk. Boot Barn Holdings is currently generating about 0.05 per unit of volatility. If you would invest  18,187  in Boot Barn Holdings on August 30, 2025 and sell it today you would earn a total of  1,224  from holding Boot Barn Holdings or generate 6.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Bright Horizons Family  vs.  Boot Barn Holdings

Bright Horizons Family

Risk-Adjusted Performance

Weakest

Over the last 90 days Bright Horizons Family has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Boot Barn Holdings

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Boot Barn Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Boot Barn may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Bright Horizons and Boot Barn

The main advantage of trading using opposite Bright Horizons and Boot Barn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Horizons position performs unexpectedly, Boot Barn 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 Boot Barn will offset losses from the drop in Boot Barn's long position.

The idea behind Bright Horizons Family and Boot Barn Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.