Correlation Between Boot Barn and KNOT Offshore
Can any of the company-specific risk be diversified away by investing in both Boot Barn and KNOT Offshore 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 KNOT Offshore 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 KNOT Offshore Partners, you can compare the effects of market volatilities on Boot Barn and KNOT Offshore 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 KNOT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boot Barn and KNOT Offshore.
Diversification Opportunities for Boot Barn and KNOT Offshore
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Boot and KNOT is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Boot Barn Holdings and KNOT Offshore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNOT Offshore Partners 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 KNOT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNOT Offshore Partners has no effect on the direction of Boot Barn i.e., Boot Barn and KNOT Offshore go up and down completely randomly.
Pair Corralation between Boot Barn and KNOT Offshore
Given the investment horizon of 90 days Boot Barn Holdings is expected to generate 1.43 times more return on investment than KNOT Offshore. However, Boot Barn is 1.43 times more volatile than KNOT Offshore Partners. It trades about 0.11 of its potential returns per unit of risk. KNOT Offshore Partners is currently generating about -0.05 per unit of risk. If you would invest 12,938 in Boot Barn Holdings on August 30, 2024 and sell it today you would earn a total of 685.00 from holding Boot Barn Holdings or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Boot Barn Holdings vs. KNOT Offshore Partners
Performance |
| Timeline |
| Boot Barn Holdings |
| KNOT Offshore Partners |
Boot Barn and KNOT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boot Barn and KNOT Offshore
The main advantage of trading using opposite Boot Barn and KNOT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boot Barn position performs unexpectedly, KNOT Offshore 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 KNOT Offshore will offset losses from the drop in KNOT Offshore's long position.| Boot Barn vs. Ross Stores | Boot Barn vs. Childrens Place | Boot Barn vs. Buckle Inc | Boot Barn vs. Guess Inc |
| KNOT Offshore vs. Danaos | KNOT Offshore vs. Global Ship Lease | KNOT Offshore vs. Euroseas | KNOT Offshore vs. Navios Maritime Partners |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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