Correlation Between Oak Woods and Boot Barn

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

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

Diversification Opportunities for Oak Woods and Boot Barn

-0.33

Correlation Coefficient

Oak Woods  Boot Barn

Very good diversification

The 3 months correlation between Oak and Boot is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Oak Woods Acquisition 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 Oak Woods 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 Oak Woods Acquisition 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 Oak Woods i.e., Oak Woods and Boot Barn go up and down completely randomly.

Pair Corralation between Oak Woods and Boot Barn

If you would invest  14,833  in Boot Barn Holdings on October 25, 2024 and sell it today you would earn a total of  1,606  from holding Boot Barn Holdings or generate 10.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Oak Woods Acquisition  vs.  Boot Barn Holdings

Oak Woods Acquisition

Risk-Adjusted Performance

1 of 100

Weak

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

Boot Barn Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boot Barn Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Boot Barn may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Oak Woods and Boot Barn

The main advantage of trading using opposite Oak Woods and Boot Barn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Woods 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 Oak Woods Acquisition 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.