Correlation Between Boot Barn and Genfit

Can any of the company-specific risk be diversified away by investing in both Boot Barn and Genfit 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 Genfit 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 Genfit, you can compare the effects of market volatilities on Boot Barn and Genfit 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 Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boot Barn and Genfit.

Diversification Opportunities for Boot Barn and Genfit

0.09

Correlation Coefficient

Boot Barn  Genfit

Significant diversification

The 3 months correlation between Boot and Genfit is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Boot Barn Holdings and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit 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 Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of Boot Barn i.e., Boot Barn and Genfit go up and down completely randomly.

Pair Corralation between Boot Barn and Genfit

Given the investment horizon of 90 days Boot Barn Holdings is expected to generate 0.92 times more return on investment than Genfit. However, Boot Barn Holdings is 1.09 times less risky than Genfit. It trades about 0.26 of its potential returns per unit of risk. Genfit is currently generating about -0.1 per unit of risk. If you would invest  14,616  in Boot Barn Holdings on October 12, 2024 and sell it today you would earn a total of  1,418  from holding Boot Barn Holdings or generate 9.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Boot Barn Holdings  vs.  Genfit

Boot Barn Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boot Barn Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Boot Barn is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Genfit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genfit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Boot Barn and Genfit

The main advantage of trading using opposite Boot Barn and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boot Barn position performs unexpectedly, Genfit 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 Genfit will offset losses from the drop in Genfit's long position.

The idea behind Boot Barn Holdings and Genfit pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.