Correlation Between National Vision and Lithium One
Can any of the company-specific risk be diversified away by investing in both National Vision and Lithium One 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 Lithium One 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 Lithium One Metals, you can compare the effects of market volatilities on National Vision and Lithium One 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 Lithium One. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Lithium One.
Diversification Opportunities for National Vision and Lithium One
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Lithium is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Lithium One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium One Metals 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 Lithium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium One Metals has no effect on the direction of National Vision i.e., National Vision and Lithium One go up and down completely randomly.
Pair Corralation between National Vision and Lithium One
Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the Lithium One. But the stock apears to be less risky and, when comparing its historical volatility, National Vision Holdings is 6.15 times less risky than Lithium One. The stock trades about -0.03 of its potential returns per unit of risk. The Lithium One Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Lithium One Metals on September 3, 2024 and sell it today you would lose (1.57) from holding Lithium One Metals or give up 62.8% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
National Vision Holdings vs. Lithium One Metals
Performance |
Timeline |
National Vision Holdings |
Lithium One Metals |
National Vision and Lithium One Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Vision and Lithium One
The main advantage of trading using opposite National Vision and Lithium One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Lithium One 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 Lithium One will offset losses from the drop in Lithium One's long position.National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
Lithium One vs. Legacy Education | Lithium One vs. Apple Inc | Lithium One vs. NVIDIA | Lithium One vs. Microsoft |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |