Correlation Between Kinsale Capital and Boot Barn
Can any of the company-specific risk be diversified away by investing in both Kinsale Capital 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 Kinsale Capital and Boot Barn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinsale Capital Group and Boot Barn Holdings, you can compare the effects of market volatilities on Kinsale Capital 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 Kinsale Capital with a short position of Boot Barn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Boot Barn.
Diversification Opportunities for Kinsale Capital and Boot Barn
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kinsale and Boot is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group 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 Kinsale Capital 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 Kinsale Capital Group 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 Kinsale Capital i.e., Kinsale Capital and Boot Barn go up and down completely randomly.
Pair Corralation between Kinsale Capital and Boot Barn
Given the investment horizon of 90 days Kinsale Capital Group is expected to generate 0.69 times more return on investment than Boot Barn. However, Kinsale Capital Group is 1.45 times less risky than Boot Barn. It trades about 0.44 of its potential returns per unit of risk. Boot Barn Holdings is currently generating about 0.11 per unit of risk. If you would invest 43,386 in Kinsale Capital Group on August 30, 2024 and sell it today you would earn a total of 8,159 from holding Kinsale Capital Group or generate 18.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kinsale Capital Group vs. Boot Barn Holdings
Performance |
| Timeline |
| Kinsale Capital Group |
| Boot Barn Holdings |
Kinsale Capital and Boot Barn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsale Capital and Boot Barn
The main advantage of trading using opposite Kinsale Capital and Boot Barn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital 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.| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
| Boot Barn vs. Ross Stores | Boot Barn vs. Childrens Place | Boot Barn vs. Buckle Inc | Boot Barn vs. Guess Inc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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