Correlation Between Boot Barn and GEN Restaurant
Can any of the company-specific risk be diversified away by investing in both Boot Barn and GEN Restaurant 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 GEN Restaurant 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 GEN Restaurant Group,, you can compare the effects of market volatilities on Boot Barn and GEN Restaurant 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 GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boot Barn and GEN Restaurant.
Diversification Opportunities for Boot Barn and GEN Restaurant
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boot and GEN is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Boot Barn Holdings and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant 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 GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Boot Barn i.e., Boot Barn and GEN Restaurant go up and down completely randomly.
Pair Corralation between Boot Barn and GEN Restaurant
Given the investment horizon of 90 days Boot Barn Holdings is expected to under-perform the GEN Restaurant. But the stock apears to be less risky and, when comparing its historical volatility, Boot Barn Holdings is 1.1 times less risky than GEN Restaurant. The stock trades about -0.11 of its potential returns per unit of risk. The GEN Restaurant Group, is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 869.00 in GEN Restaurant Group, on August 26, 2024 and sell it today you would lose (92.00) from holding GEN Restaurant Group, or give up 10.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boot Barn Holdings vs. GEN Restaurant Group,
Performance |
| Timeline |
| Boot Barn Holdings |
| GEN Restaurant Group, |
Boot Barn and GEN Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boot Barn and GEN Restaurant
The main advantage of trading using opposite Boot Barn and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boot Barn position performs unexpectedly, GEN Restaurant 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 GEN Restaurant will offset losses from the drop in GEN Restaurant's long position.| Boot Barn vs. Ross Stores | Boot Barn vs. Childrens Place | Boot Barn vs. Buckle Inc | Boot Barn vs. Guess Inc |
| GEN Restaurant vs. Dream Finders Homes | GEN Restaurant vs. Boot Barn Holdings | GEN Restaurant vs. Victorias Secret Co | GEN Restaurant vs. Parker Hannifin |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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