Correlation Between Boot Barn and SL Green
Can any of the company-specific risk be diversified away by investing in both Boot Barn and SL Green 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 SL Green 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 SL Green Realty, you can compare the effects of market volatilities on Boot Barn and SL Green 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 SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boot Barn and SL Green.
Diversification Opportunities for Boot Barn and SL Green
Very good diversification
The 3 months correlation between Boot and SLG is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Boot Barn Holdings and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Boot Barn i.e., Boot Barn and SL Green go up and down completely randomly.
Pair Corralation between Boot Barn and SL Green
Given the investment horizon of 90 days Boot Barn is expected to generate 1.33 times less return on investment than SL Green. In addition to that, Boot Barn is 1.53 times more volatile than SL Green Realty. It trades about 0.08 of its total potential returns per unit of risk. SL Green Realty is currently generating about 0.15 per unit of volatility. If you would invest 5,119 in SL Green Realty on September 3, 2024 and sell it today you would earn a total of 2,700 from holding SL Green Realty or generate 52.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boot Barn Holdings vs. SL Green Realty
Performance |
| Timeline |
| Boot Barn Holdings |
| SL Green Realty |
Boot Barn and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boot Barn and SL Green
The main advantage of trading using opposite Boot Barn and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boot Barn position performs unexpectedly, SL Green 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 SL Green will offset losses from the drop in SL Green's long position.| Boot Barn vs. Ross Stores | Boot Barn vs. Childrens Place | Boot Barn vs. Buckle Inc | Boot Barn vs. Guess Inc |
| SL Green vs. Boston Properties | SL Green vs. Douglas Emmett | SL Green vs. Kilroy Realty Corp | SL Green vs. Alexandria Real Estate |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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