Correlation Between Boot Barn and Lmp Automotive
Can any of the company-specific risk be diversified away by investing in both Boot Barn and Lmp Automotive 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 Lmp Automotive 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 Lmp Automotive Holdings, you can compare the effects of market volatilities on Boot Barn and Lmp Automotive 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 Lmp Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boot Barn and Lmp Automotive.
Diversification Opportunities for Boot Barn and Lmp Automotive
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boot and Lmp is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Boot Barn Holdings and Lmp Automotive Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lmp Automotive Holdings 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 Lmp Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lmp Automotive Holdings has no effect on the direction of Boot Barn i.e., Boot Barn and Lmp Automotive go up and down completely randomly.
Pair Corralation between Boot Barn and Lmp Automotive
If you would invest 7,373 in Boot Barn Holdings on January 26, 2024 and sell it today you would earn a total of 3,362 from holding Boot Barn Holdings or generate 45.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 1.61% |
Values | Daily Returns |
Boot Barn Holdings vs. Lmp Automotive Holdings
Performance |
Timeline |
Boot Barn Holdings |
Lmp Automotive Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boot Barn and Lmp Automotive Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boot Barn and Lmp Automotive
The main advantage of trading using opposite Boot Barn and Lmp Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boot Barn position performs unexpectedly, Lmp Automotive 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 Lmp Automotive will offset losses from the drop in Lmp Automotive's long position.Boot Barn vs. Shoe Carnival | Boot Barn vs. Hibbett Sports | Boot Barn vs. Zumiez Inc | Boot Barn vs. Tillys Inc |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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