Correlation Between National Vision and Ecolab
Can any of the company-specific risk be diversified away by investing in both National Vision and Ecolab 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 Ecolab 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 Ecolab Inc, you can compare the effects of market volatilities on National Vision and Ecolab 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 Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Ecolab.
Diversification Opportunities for National Vision and Ecolab
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Ecolab is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab 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 Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of National Vision i.e., National Vision and Ecolab go up and down completely randomly.
Pair Corralation between National Vision and Ecolab
Considering the 90-day investment horizon National Vision is expected to generate 1.53 times less return on investment than Ecolab. In addition to that, National Vision is 1.79 times more volatile than Ecolab Inc. It trades about 0.13 of its total potential returns per unit of risk. Ecolab Inc is currently generating about 0.35 per unit of volatility. If you would invest 23,193 in Ecolab Inc on November 4, 2024 and sell it today you would earn a total of 1,826 from holding Ecolab Inc or generate 7.87% 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. Ecolab Inc
Performance |
| Timeline |
| National Vision Holdings |
| Ecolab Inc |
National Vision and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Ecolab
The main advantage of trading using opposite National Vision and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |