Correlation Between Boot Barn and J Long
Can any of the company-specific risk be diversified away by investing in both Boot Barn and J Long 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 J Long 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 J Long Group Limited, you can compare the effects of market volatilities on Boot Barn and J Long 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 J Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boot Barn and J Long.
Diversification Opportunities for Boot Barn and J Long
Very poor diversification
The 3 months correlation between Boot and J Long is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Boot Barn Holdings and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group 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 J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of Boot Barn i.e., Boot Barn and J Long go up and down completely randomly.
Pair Corralation between Boot Barn and J Long
Given the investment horizon of 90 days Boot Barn is expected to generate 1.39 times less return on investment than J Long. In addition to that, Boot Barn is 1.02 times more volatile than J Long Group Limited. It trades about 0.21 of its total potential returns per unit of risk. J Long Group Limited is currently generating about 0.3 per unit of volatility. If you would invest 335.00 in J Long Group Limited on May 3, 2025 and sell it today you would earn a total of 272.00 from holding J Long Group Limited or generate 81.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Boot Barn Holdings vs. J Long Group Limited
Performance |
Timeline |
Boot Barn Holdings |
J Long Group |
Boot Barn and J Long Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boot Barn and J Long
The main advantage of trading using opposite Boot Barn and J Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boot Barn position performs unexpectedly, J Long 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 J Long will offset losses from the drop in J Long's long position.Boot Barn vs. Burlington Stores | Boot Barn vs. Buckle Inc | Boot Barn vs. Carters | Boot Barn vs. Citi Trends |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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