Correlation Between Fossil and Boot Barn
Can any of the company-specific risk be diversified away by investing in both Fossil 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 Fossil and Boot Barn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fossil Group and Boot Barn Holdings, you can compare the effects of market volatilities on Fossil 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 Fossil with a short position of Boot Barn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil and Boot Barn.
Diversification Opportunities for Fossil and Boot Barn
Very poor diversification
The 3 months correlation between Fossil and Boot is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group 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 Fossil 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 Fossil Group 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 Fossil i.e., Fossil and Boot Barn go up and down completely randomly.
Pair Corralation between Fossil and Boot Barn
Given the investment horizon of 90 days Fossil Group is expected to generate 1.39 times more return on investment than Boot Barn. However, Fossil is 1.39 times more volatile than Boot Barn Holdings. It trades about 0.21 of its potential returns per unit of risk. Boot Barn Holdings is currently generating about 0.28 per unit of risk. If you would invest 93.00 in Fossil Group on April 23, 2025 and sell it today you would earn a total of 66.00 from holding Fossil Group or generate 70.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fossil Group vs. Boot Barn Holdings
Performance |
| Timeline |
| Fossil Group |
| Boot Barn Holdings |
Fossil and Boot Barn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fossil and Boot Barn
The main advantage of trading using opposite Fossil and Boot Barn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fossil 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.| Fossil vs. Levi Strauss Co | Fossil vs. Under Armour A | Fossil vs. Oxford Industries | Fossil vs. Kontoor Brands |
| Boot Barn vs. Burlington Stores | Boot Barn vs. Buckle Inc | Boot Barn vs. Carters | Boot Barn vs. Citi Trends |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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