Correlation Between IAMGOLD and Boot Barn

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

By analyzing existing cross correlation between IAMGOLD P 575 and Boot Barn Holdings, you can compare the effects of market volatilities on IAMGOLD 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 IAMGOLD with a short position of Boot Barn. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAMGOLD and Boot Barn.

Diversification Opportunities for IAMGOLD and Boot Barn

-0.23

Correlation Coefficient

IAMGOLD  Boot Barn

Very good diversification

The 3 months correlation between IAMGOLD and Boot is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding IAMGOLD P 575 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 IAMGOLD 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 IAMGOLD P 575 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 IAMGOLD i.e., IAMGOLD and Boot Barn go up and down completely randomly.

Pair Corralation between IAMGOLD and Boot Barn

Assuming the 90 days trading horizon IAMGOLD P 575 is expected to generate 17.32 times more return on investment than Boot Barn. However, IAMGOLD is 17.32 times more volatile than Boot Barn Holdings. It trades about 0.05 of its potential returns per unit of risk. Boot Barn Holdings is currently generating about 0.06 per unit of risk. If you would invest  7,937  in IAMGOLD P 575 on October 13, 2024 and sell it today you would lose (37.00) from holding IAMGOLD P 575 or give up 0.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.08%
Values	Daily Returns

IAMGOLD P 575  vs.  Boot Barn Holdings

IAMGOLD P 575

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IAMGOLD P 575 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for IAMGOLD P 575 investors.

Boot Barn Holdings

Risk-Adjusted Performance

0 of 100

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 IAMGOLD and Boot Barn

The main advantage of trading using opposite IAMGOLD and Boot Barn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAMGOLD 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 IAMGOLD P 575 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.