Correlation Between National Vision and Birks
Can any of the company-specific risk be diversified away by investing in both National Vision and Birks 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 Birks 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 Birks Group, you can compare the effects of market volatilities on National Vision and Birks 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 Birks. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Birks.
Diversification Opportunities for National Vision and Birks
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Birks is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Birks Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birks Group 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 Birks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birks Group has no effect on the direction of National Vision i.e., National Vision and Birks go up and down completely randomly.
Pair Corralation between National Vision and Birks
Considering the 90-day investment horizon National Vision Holdings is expected to generate 0.88 times more return on investment than Birks. However, National Vision Holdings is 1.13 times less risky than Birks. It trades about -0.03 of its potential returns per unit of risk. Birks Group is currently generating about -0.04 per unit of risk. If you would invest 1,880 in National Vision Holdings on September 12, 2024 and sell it today you would lose (686.00) from holding National Vision Holdings or give up 36.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. Birks Group
Performance |
| Timeline |
| National Vision Holdings |
| Birks Group |
National Vision and Birks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Birks
The main advantage of trading using opposite National Vision and Birks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Birks 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 Birks will offset losses from the drop in Birks' long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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