Correlation Between National Vision and ICC Holdings
Can any of the company-specific risk be diversified away by investing in both National Vision and ICC Holdings 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 ICC Holdings 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 ICC Holdings, you can compare the effects of market volatilities on National Vision and ICC Holdings 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 ICC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and ICC Holdings.
Diversification Opportunities for National Vision and ICC Holdings
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and ICC is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings 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 ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of National Vision i.e., National Vision and ICC Holdings go up and down completely randomly.
Pair Corralation between National Vision and ICC Holdings
Considering the 90-day investment horizon National Vision Holdings is expected to generate 4.38 times more return on investment than ICC Holdings. However, National Vision is 4.38 times more volatile than ICC Holdings. It trades about 0.14 of its potential returns per unit of risk. ICC Holdings is currently generating about 0.07 per unit of risk. If you would invest 1,091 in National Vision Holdings on August 29, 2024 and sell it today you would earn a total of 154.00 from holding National Vision Holdings or generate 14.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.72% |
| Values | Daily Returns |
National Vision Holdings vs. ICC Holdings
Performance |
| Timeline |
| National Vision Holdings |
| ICC Holdings |
National Vision and ICC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and ICC Holdings
The main advantage of trading using opposite National Vision and ICC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, ICC Holdings 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 ICC Holdings will offset losses from the drop in ICC Holdings' long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| ICC Holdings vs. AMERISAFE | ICC Holdings vs. Enact Holdings | ICC Holdings vs. Essent Group | ICC Holdings vs. Radian Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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