Correlation Between National Vision and Bowlin Travel
Can any of the company-specific risk be diversified away by investing in both National Vision and Bowlin Travel 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 Bowlin Travel 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 Bowlin Travel Centers, you can compare the effects of market volatilities on National Vision and Bowlin Travel 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 Bowlin Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Bowlin Travel.
Diversification Opportunities for National Vision and Bowlin Travel
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Bowlin is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Bowlin Travel Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowlin Travel Centers 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 Bowlin Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowlin Travel Centers has no effect on the direction of National Vision i.e., National Vision and Bowlin Travel go up and down completely randomly.
Pair Corralation between National Vision and Bowlin Travel
Considering the 90-day investment horizon National Vision Holdings is expected to generate 1.55 times more return on investment than Bowlin Travel. However, National Vision is 1.55 times more volatile than Bowlin Travel Centers. It trades about 0.28 of its potential returns per unit of risk. Bowlin Travel Centers is currently generating about -0.18 per unit of risk. If you would invest 980.00 in National Vision Holdings on August 24, 2024 and sell it today you would earn a total of 175.00 from holding National Vision Holdings or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
National Vision Holdings vs. Bowlin Travel Centers
Performance |
| Timeline |
| National Vision Holdings |
| Bowlin Travel Centers |
National Vision and Bowlin Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Bowlin Travel
The main advantage of trading using opposite National Vision and Bowlin Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Bowlin Travel 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 Bowlin Travel will offset losses from the drop in Bowlin Travel's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| Bowlin Travel vs. Citi Trends | Bowlin Travel vs. Everspin Technologies | Bowlin Travel vs. Skechers USA | Bowlin Travel vs. Kontoor Brands |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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