Correlation Between National Vision and NiSource
Can any of the company-specific risk be diversified away by investing in both National Vision and NiSource 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 NiSource 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 NiSource, you can compare the effects of market volatilities on National Vision and NiSource 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 NiSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and NiSource.
Diversification Opportunities for National Vision and NiSource
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and NiSource is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and NiSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NiSource 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 NiSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NiSource has no effect on the direction of National Vision i.e., National Vision and NiSource go up and down completely randomly.
Pair Corralation between National Vision and NiSource
Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the NiSource. In addition to that, National Vision is 3.63 times more volatile than NiSource. It trades about -0.04 of its total potential returns per unit of risk. NiSource is currently generating about 0.27 per unit of volatility. If you would invest 2,815 in NiSource on September 1, 2024 and sell it today you would earn a total of 994.00 from holding NiSource or generate 35.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. NiSource
Performance |
| Timeline |
| National Vision Holdings |
| NiSource |
National Vision and NiSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and NiSource
The main advantage of trading using opposite National Vision and NiSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, NiSource 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 NiSource will offset losses from the drop in NiSource's long position.| National Vision vs. Alcon AG | National Vision vs. The Cooper Companies, | National Vision vs. AngioDynamics | National Vision vs. AptarGroup |
| NiSource vs. NorthWestern | NiSource vs. Avista | NiSource vs. Otter Tail | NiSource vs. Companhia Paranaense de |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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