Correlation Between Groupon and Boot Barn
Can any of the company-specific risk be diversified away by investing in both Groupon 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 Groupon and Boot Barn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupon and Boot Barn Holdings, you can compare the effects of market volatilities on Groupon 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 Groupon with a short position of Boot Barn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupon and Boot Barn.
Diversification Opportunities for Groupon and Boot Barn
Poor diversification
The 3 months correlation between Groupon and Boot is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Groupon 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 Groupon 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 Groupon 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 Groupon i.e., Groupon and Boot Barn go up and down completely randomly.
Pair Corralation between Groupon and Boot Barn
Given the investment horizon of 90 days Groupon is expected to generate 1.48 times more return on investment than Boot Barn. However, Groupon is 1.48 times more volatile than Boot Barn Holdings. It trades about 0.17 of its potential returns per unit of risk. Boot Barn Holdings is currently generating about 0.09 per unit of risk. If you would invest 2,667 in Groupon on April 22, 2025 and sell it today you would earn a total of 576.00 from holding Groupon or generate 21.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groupon vs. Boot Barn Holdings
Performance |
| Timeline |
| Groupon |
| Boot Barn Holdings |
Groupon and Boot Barn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupon and Boot Barn
The main advantage of trading using opposite Groupon and Boot Barn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupon 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.| Groupon vs. Yelp Inc | Groupon vs. ANGI Homeservices | Groupon vs. Getty Images Holdings | Groupon vs. BuzzFeed |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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