Correlation Between Boot Barn and China Eastern
Can any of the company-specific risk be diversified away by investing in both Boot Barn and China Eastern 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 China Eastern 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 China Eastern Airlines, you can compare the effects of market volatilities on Boot Barn and China Eastern 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 China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boot Barn and China Eastern.
Diversification Opportunities for Boot Barn and China Eastern
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Boot and China is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Boot Barn Holdings and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines 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 China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Boot Barn i.e., Boot Barn and China Eastern go up and down completely randomly.
Pair Corralation between Boot Barn and China Eastern
If you would invest 14,775 in Boot Barn Holdings on October 21, 2024 and sell it today you would earn a total of 1,295 from holding Boot Barn Holdings or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Boot Barn Holdings vs. China Eastern Airlines
Performance |
| Timeline |
| Boot Barn Holdings |
| China Eastern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boot Barn and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boot Barn and China Eastern
The main advantage of trading using opposite Boot Barn and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boot Barn position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern's long position.| Boot Barn vs. Ross Stores | Boot Barn vs. Childrens Place | Boot Barn vs. Buckle Inc | Boot Barn vs. Guess Inc |
| China Eastern vs. Glacier Bancorp | China Eastern vs. Albemarle | China Eastern vs. Summit Bank Group | China Eastern vs. Univest Pennsylvania |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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