Correlation Between National Vision and Chewy
Can any of the company-specific risk be diversified away by investing in both National Vision and Chewy 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 Chewy 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 Chewy Inc, you can compare the effects of market volatilities on National Vision and Chewy 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 Chewy. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Chewy.
Diversification Opportunities for National Vision and Chewy
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Chewy is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Chewy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chewy 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 Chewy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chewy Inc has no effect on the direction of National Vision i.e., National Vision and Chewy go up and down completely randomly.
Pair Corralation between National Vision and Chewy
Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the Chewy. But the stock apears to be less risky and, when comparing its historical volatility, National Vision Holdings is 1.17 times less risky than Chewy. The stock trades about -0.04 of its potential returns per unit of risk. The Chewy Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,026 in Chewy Inc on September 4, 2024 and sell it today you would earn a total of 1,337 from holding Chewy Inc or generate 65.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. Chewy Inc
Performance |
| Timeline |
| National Vision Holdings |
| Chewy Inc |
National Vision and Chewy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Chewy
The main advantage of trading using opposite National Vision and Chewy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Chewy 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 Chewy will offset losses from the drop in Chewy's long position.| National Vision vs. Alcon AG | National Vision vs. The Cooper Companies, | National Vision vs. AngioDynamics | National Vision vs. AptarGroup |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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