Correlation Between Victorias Secret and Boot Barn
Can any of the company-specific risk be diversified away by investing in both Victorias Secret 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 Victorias Secret and Boot Barn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victorias Secret Co and Boot Barn Holdings, you can compare the effects of market volatilities on Victorias Secret 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 Victorias Secret with a short position of Boot Barn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Boot Barn.
Diversification Opportunities for Victorias Secret and Boot Barn
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Victorias and Boot is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co 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 Victorias Secret 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 Victorias Secret Co 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 Victorias Secret i.e., Victorias Secret and Boot Barn go up and down completely randomly.
Pair Corralation between Victorias Secret and Boot Barn
Given the investment horizon of 90 days Victorias Secret Co is expected to generate 0.58 times more return on investment than Boot Barn. However, Victorias Secret Co is 1.73 times less risky than Boot Barn. It trades about 0.41 of its potential returns per unit of risk. Boot Barn Holdings is currently generating about -0.07 per unit of risk. If you would invest 2,942 in Victorias Secret Co on August 28, 2024 and sell it today you would earn a total of 798.00 from holding Victorias Secret Co or generate 27.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victorias Secret Co vs. Boot Barn Holdings
Performance |
| Timeline |
| Victorias Secret |
| Boot Barn Holdings |
Victorias Secret and Boot Barn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and Boot Barn
The main advantage of trading using opposite Victorias Secret and Boot Barn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret 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.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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