Correlation Between National Vision and Caseys General
Can any of the company-specific risk be diversified away by investing in both National Vision and Caseys General 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 Caseys General 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 Caseys General Stores, you can compare the effects of market volatilities on National Vision and Caseys General 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 Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Caseys General.
Diversification Opportunities for National Vision and Caseys General
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Caseys is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores 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 Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of National Vision i.e., National Vision and Caseys General go up and down completely randomly.
Pair Corralation between National Vision and Caseys General
Considering the 90-day investment horizon National Vision is expected to generate 1.2 times less return on investment than Caseys General. In addition to that, National Vision is 1.81 times more volatile than Caseys General Stores. It trades about 0.05 of its total potential returns per unit of risk. Caseys General Stores is currently generating about 0.1 per unit of volatility. If you would invest 37,699 in Caseys General Stores on October 31, 2024 and sell it today you would earn a total of 4,260 from holding Caseys General Stores or generate 11.3% 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. Caseys General Stores
Performance |
| Timeline |
| National Vision Holdings |
| Caseys General Stores |
National Vision and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Caseys General
The main advantage of trading using opposite National Vision and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| Caseys General vs. Leslies | Caseys General vs. Sally Beauty Holdings | Caseys General vs. ODP Corp | Caseys General 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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