Correlation Between J Long and Boot Barn

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

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

Diversification Opportunities for J Long and Boot Barn

0.9

Correlation Coefficient

J Long  Boot Barn

Almost no diversification

The 3 months correlation between J Long and Boot is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited 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 J Long 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 J Long Group Limited 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 J Long i.e., J Long and Boot Barn go up and down completely randomly.

Pair Corralation between J Long and Boot Barn

Allowing for the 90-day total investment horizon J Long Group Limited is expected to under-perform the Boot Barn. In addition to that, J Long is 3.04 times more volatile than Boot Barn Holdings. It trades about -0.01 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  9,210  in Boot Barn Holdings on April 8, 2025 and sell it today you would earn a total of  7,283  from holding Boot Barn Holdings or generate 79.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	73.54%
Values	Daily Returns

J Long Group Limited  vs.  Boot Barn Holdings

J Long Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in J Long Group Limited are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, J Long disclosed 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 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Boot Barn unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with J Long and Boot Barn

The main advantage of trading using opposite J Long and Boot Barn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Long 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 J Long Group Limited 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.