Correlation Between National Vision and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both National Vision and Metropolitan Bank 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 Metropolitan Bank 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 Metropolitan Bank and, you can compare the effects of market volatilities on National Vision and Metropolitan Bank 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 Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Metropolitan Bank.
Diversification Opportunities for National Vision and Metropolitan Bank
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Metropolitan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Metropolitan Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank 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 Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank has no effect on the direction of National Vision i.e., National Vision and Metropolitan Bank go up and down completely randomly.
Pair Corralation between National Vision and Metropolitan Bank
If you would invest 1,163 in National Vision Holdings on September 4, 2024 and sell it today you would lose (8.00) from holding National Vision Holdings or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. Metropolitan Bank and
Performance |
| Timeline |
| National Vision Holdings |
| Metropolitan Bank |
National Vision and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Metropolitan Bank
The main advantage of trading using opposite National Vision and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's long position.| National Vision vs. Alcon AG | National Vision vs. The Cooper Companies, | National Vision vs. AngioDynamics | National Vision vs. AptarGroup |
| Metropolitan Bank vs. First Hawaiian | Metropolitan Bank vs. Central Pacific Financial | Metropolitan Bank vs. Territorial Bancorp | Metropolitan Bank vs. Comerica |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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