Correlation Between National Vision and Fanhua
Can any of the company-specific risk be diversified away by investing in both National Vision and Fanhua 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 National Vision and Fanhua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Vision Holdings and Fanhua Inc, you can compare the effects of market volatilities on National Vision and Fanhua 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 National Vision with a short position of Fanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Fanhua.
Diversification Opportunities for National Vision and Fanhua
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Fanhua is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Fanhua Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanhua Inc and National Vision 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 National Vision Holdings are associated (or correlated) with Fanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanhua Inc has no effect on the direction of National Vision i.e., National Vision and Fanhua go up and down completely randomly.
Pair Corralation between National Vision and Fanhua
Considering the 90-day investment horizon National Vision Holdings is expected to generate 0.68 times more return on investment than Fanhua. However, National Vision Holdings is 1.47 times less risky than Fanhua. It trades about -0.08 of its potential returns per unit of risk. Fanhua Inc is currently generating about -0.14 per unit of risk. If you would invest 1,922 in National Vision Holdings on October 12, 2024 and sell it today you would lose (868.00) from holding National Vision Holdings or give up 45.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
National Vision Holdings vs. Fanhua Inc
Performance |
| Timeline |
| National Vision Holdings |
| Fanhua Inc |
National Vision and Fanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Fanhua
The main advantage of trading using opposite National Vision and Fanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Fanhua 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 Fanhua will offset losses from the drop in Fanhua's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| Fanhua vs. National Vision Holdings | Fanhua vs. Skillful Craftsman Education | Fanhua vs. HUTCHMED DRC | Fanhua vs. Lindblad Expeditions Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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