Correlation Between Boot Barn and Five Below

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

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

Diversification Opportunities for Boot Barn and Five Below

0.63

Correlation Coefficient

Boot Barn  Five Below

Poor diversification

The 3 months correlation between Boot and Five is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Boot Barn Holdings and Five Below in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Below and Boot Barn 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 Boot Barn Holdings are associated (or correlated) with Five Below. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Below has no effect on the direction of Boot Barn i.e., Boot Barn and Five Below go up and down completely randomly.

Pair Corralation between Boot Barn and Five Below

Given the investment horizon of 90 days Boot Barn is expected to generate 2.77 times less return on investment than Five Below. In addition to that, Boot Barn is 1.11 times more volatile than Five Below. It trades about 0.05 of its total potential returns per unit of risk. Five Below is currently generating about 0.16 per unit of volatility. If you would invest  11,610  in Five Below on May 27, 2025 and sell it today you would earn a total of  2,439  from holding Five Below or generate 21.01% return on investment over 90 days.

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

Boot Barn Holdings  vs.  Five Below

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 conflicting basic indicators, Boot Barn may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Five Below

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Five Below are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Five Below exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boot Barn and Five Below

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

The idea behind Boot Barn Holdings and Five Below 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.