Correlation Between National Vision and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both National Vision and AerSale Corp 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 AerSale Corp 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 AerSale Corp, you can compare the effects of market volatilities on National Vision and AerSale Corp 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 AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and AerSale Corp.
Diversification Opportunities for National Vision and AerSale Corp
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and AerSale is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp 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 AerSale Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerSale Corp has no effect on the direction of National Vision i.e., National Vision and AerSale Corp go up and down completely randomly.
Pair Corralation between National Vision and AerSale Corp
Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the AerSale Corp. In addition to that, National Vision is 1.09 times more volatile than AerSale Corp. It trades about -0.05 of its total potential returns per unit of risk. AerSale Corp is currently generating about -0.04 per unit of volatility. If you would invest 1,569 in AerSale Corp on August 28, 2024 and sell it today you would lose (925.00) from holding AerSale Corp or give up 58.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. AerSale Corp
Performance |
| Timeline |
| National Vision Holdings |
| AerSale Corp |
National Vision and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and AerSale Corp
The main advantage of trading using opposite National Vision and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, AerSale Corp 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 AerSale Corp will offset losses from the drop in AerSale Corp's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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