Correlation Between Citigroup and Boot Barn

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

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

Diversification Opportunities for Citigroup and Boot Barn

0.83

Correlation Coefficient

Citigroup  Boot Barn

Very poor diversification

The 3 months correlation between Citigroup and Boot is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup 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 Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and Boot Barn go up and down completely randomly.

Pair Corralation between Citigroup and Boot Barn

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.65 times less return on investment than Boot Barn. But when comparing it to its historical volatility, Citigroup is 2.28 times less risky than Boot Barn. It trades about 0.43 of its potential returns per unit of risk. Boot Barn Holdings is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  8,913  in Boot Barn Holdings on April 21, 2025 and sell it today you would earn a total of  8,146  from holding Boot Barn Holdings or generate 91.39% return on investment over 90 days.

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

Citigroup  vs.  Boot Barn Holdings

Citigroup

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Boot Barn Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boot Barn Holdings are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Boot Barn unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citigroup and Boot Barn

The main advantage of trading using opposite Citigroup and Boot Barn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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 Citigroup 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.

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 CEOs Directory module to screen CEOs from public companies around the world.