Correlation Between National Vision and Franchise
Can any of the company-specific risk be diversified away by investing in both National Vision and Franchise 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 Franchise 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 Franchise Group, you can compare the effects of market volatilities on National Vision and Franchise 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 Franchise. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Franchise.
Diversification Opportunities for National Vision and Franchise
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Franchise is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Franchise Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franchise Group 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 Franchise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franchise Group has no effect on the direction of National Vision i.e., National Vision and Franchise go up and down completely randomly.
Pair Corralation between National Vision and Franchise
If you would invest 1,018 in National Vision Holdings on August 31, 2024 and sell it today you would earn a total of 220.00 from holding National Vision Holdings or generate 21.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
National Vision Holdings vs. Franchise Group
Performance |
| Timeline |
| National Vision Holdings |
| Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
National Vision and Franchise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Franchise
The main advantage of trading using opposite National Vision and Franchise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Franchise 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 Franchise will offset losses from the drop in Franchise's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| Franchise vs. Mega Uranium | Franchise vs. Laramide Resources | Franchise vs. NXG NextGen Infrastructure | Franchise vs. Pinetree Capital |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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