Correlation Between National Vision and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both National Vision and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on National Vision and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Canlan Ice.
Diversification Opportunities for National Vision and Canlan Ice
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Canlan is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of National Vision i.e., National Vision and Canlan Ice go up and down completely randomly.
Pair Corralation between National Vision and Canlan Ice
Considering the 90-day investment horizon National Vision Holdings is expected to generate 15.71 times more return on investment than Canlan Ice. However, National Vision is 15.71 times more volatile than Canlan Ice Sports. It trades about 0.12 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.18 per unit of risk. If you would invest 1,051 in National Vision Holdings on August 29, 2024 and sell it today you would earn a total of 194.00 from holding National Vision Holdings or generate 18.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
National Vision Holdings vs. Canlan Ice Sports
Performance |
| Timeline |
| National Vision Holdings |
| Canlan Ice Sports |
National Vision and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Canlan Ice
The main advantage of trading using opposite National Vision and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| Canlan Ice vs. ANTA Sports Products | Canlan Ice vs. ANTA Sports Products | Canlan Ice vs. Carnival Plc ADS | Canlan Ice vs. BANDAI NAMCO Holdings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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