Correlation Between National Vision and Card Factory
Can any of the company-specific risk be diversified away by investing in both National Vision and Card Factory 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 Card Factory 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 Card Factory plc, you can compare the effects of market volatilities on National Vision and Card Factory 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 Card Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Card Factory.
Diversification Opportunities for National Vision and Card Factory
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Card is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Card Factory plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Card Factory plc 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 Card Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Card Factory plc has no effect on the direction of National Vision i.e., National Vision and Card Factory go up and down completely randomly.
Pair Corralation between National Vision and Card Factory
Considering the 90-day investment horizon National Vision Holdings is expected to generate 0.58 times more return on investment than Card Factory. However, National Vision Holdings is 1.73 times less risky than Card Factory. It trades about 0.35 of its potential returns per unit of risk. Card Factory plc is currently generating about -0.2 per unit of risk. If you would invest 996.00 in National Vision Holdings on August 28, 2024 and sell it today you would earn a total of 226.00 from holding National Vision Holdings or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. Card Factory plc
Performance |
| Timeline |
| National Vision Holdings |
| Card Factory plc |
National Vision and Card Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Card Factory
The main advantage of trading using opposite National Vision and Card Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Card Factory 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 Card Factory will offset losses from the drop in Card Factory's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| Card Factory vs. Dixons Carphone plc | Card Factory vs. Ceconomy AG ADR | Card Factory vs. Tandy Leather Factory | Card Factory vs. Green River Gold |
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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