Correlation Between Mosaic and Boot Barn

Can any of the company-specific risk be diversified away by investing in both Mosaic 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 Mosaic and Boot Barn into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Mosaic and Boot Barn Holdings, you can compare the effects of market volatilities on Mosaic 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 Mosaic with a short position of Boot Barn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mosaic and Boot Barn.

Diversification Opportunities for Mosaic and Boot Barn

-0.3

Correlation Coefficient

Mosaic  Boot Barn

Very good diversification

The 3 months correlation between Mosaic and Boot is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic 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 Mosaic 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 The Mosaic 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 Mosaic i.e., Mosaic and Boot Barn go up and down completely randomly.

Pair Corralation between Mosaic and Boot Barn

Considering the 90-day investment horizon The Mosaic is expected to generate 0.69 times more return on investment than Boot Barn. However, The Mosaic is 1.46 times less risky than Boot Barn. It trades about 0.05 of its potential returns per unit of risk. Boot Barn Holdings is currently generating about 0.0 per unit of risk. If you would invest  2,582  in The Mosaic on October 21, 2024 and sell it today you would earn a total of  132.00  from holding The Mosaic or generate 5.11% return on investment over 90 days.

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

The Mosaic  vs.  Boot Barn Holdings

Mosaic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mosaic may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Boot Barn Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boot Barn Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Mosaic and Boot Barn

The main advantage of trading using opposite Mosaic and Boot Barn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mosaic 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.

The idea behind The Mosaic and Boot Barn Holdings 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.