Correlation Between National Vision and NextTrip
Can any of the company-specific risk be diversified away by investing in both National Vision and NextTrip 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 NextTrip 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 NextTrip, you can compare the effects of market volatilities on National Vision and NextTrip 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 NextTrip. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and NextTrip.
Diversification Opportunities for National Vision and NextTrip
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and NextTrip is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and NextTrip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextTrip 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 NextTrip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextTrip has no effect on the direction of National Vision i.e., National Vision and NextTrip go up and down completely randomly.
Pair Corralation between National Vision and NextTrip
Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the NextTrip. But the stock apears to be less risky and, when comparing its historical volatility, National Vision Holdings is 5.94 times less risky than NextTrip. The stock trades about -0.03 of its potential returns per unit of risk. The NextTrip is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 185.00 in NextTrip on September 5, 2024 and sell it today you would earn a total of 169.00 from holding NextTrip or generate 91.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
National Vision Holdings vs. NextTrip
Performance |
| Timeline |
| National Vision Holdings |
| NextTrip |
National Vision and NextTrip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and NextTrip
The main advantage of trading using opposite National Vision and NextTrip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, NextTrip 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 NextTrip will offset losses from the drop in NextTrip's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| NextTrip vs. Wabash National | NextTrip vs. Li Auto | NextTrip vs. Lucid Group | NextTrip vs. Marine Products |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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