Correlation Between Acme United and National Vision
Can any of the company-specific risk be diversified away by investing in both Acme United and National Vision 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 Acme United and National Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acme United and National Vision Holdings, you can compare the effects of market volatilities on Acme United and National Vision 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 Acme United with a short position of National Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acme United and National Vision.
Diversification Opportunities for Acme United and National Vision
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Acme and National is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Acme United and National Vision Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Vision Holdings and Acme United 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 Acme United are associated (or correlated) with National Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Vision Holdings has no effect on the direction of Acme United i.e., Acme United and National Vision go up and down completely randomly.
Pair Corralation between Acme United and National Vision
Considering the 90-day investment horizon Acme United is expected to generate 0.99 times more return on investment than National Vision. However, Acme United is 1.01 times less risky than National Vision. It trades about 0.06 of its potential returns per unit of risk. National Vision Holdings is currently generating about -0.05 per unit of risk. If you would invest 2,472 in Acme United on September 1, 2024 and sell it today you would earn a total of 1,979 from holding Acme United or generate 80.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acme United vs. National Vision Holdings
Performance |
| Timeline |
| Acme United |
| National Vision Holdings |
Acme United and National Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acme United and National Vision
The main advantage of trading using opposite Acme United and National Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acme United position performs unexpectedly, National Vision 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 National Vision will offset losses from the drop in National Vision's long position.| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands Holdings |
| National Vision vs. Alcon AG | National Vision vs. The Cooper Companies, | National Vision vs. AngioDynamics | National Vision vs. AptarGroup |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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