Correlation Between National Vision and Baozun
Can any of the company-specific risk be diversified away by investing in both National Vision and Baozun 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 Baozun 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 Baozun Inc, you can compare the effects of market volatilities on National Vision and Baozun 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 Baozun. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Baozun.
Diversification Opportunities for National Vision and Baozun
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Baozun is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Baozun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baozun 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 Baozun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baozun Inc has no effect on the direction of National Vision i.e., National Vision and Baozun go up and down completely randomly.
Pair Corralation between National Vision and Baozun
Considering the 90-day investment horizon National Vision is expected to generate 31.11 times less return on investment than Baozun. But when comparing it to its historical volatility, National Vision Holdings is 2.21 times less risky than Baozun. It trades about 0.0 of its potential returns per unit of risk. Baozun Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 318.00 in Baozun Inc on November 29, 2024 and sell it today you would earn a total of 13.00 from holding Baozun Inc or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. Baozun Inc
Performance |
| Timeline |
| National Vision Holdings |
| Baozun Inc |
National Vision and Baozun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Baozun
The main advantage of trading using opposite National Vision and Baozun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Baozun 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 Baozun will offset losses from the drop in Baozun'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 CEOs Directory module to screen CEOs from public companies around the world.
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