Correlation Between National Vision and Sea
Can any of the company-specific risk be diversified away by investing in both National Vision and Sea 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 Sea 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 Sea, you can compare the effects of market volatilities on National Vision and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Sea.
Diversification Opportunities for National Vision and Sea
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Sea is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of National Vision i.e., National Vision and Sea go up and down completely randomly.
Pair Corralation between National Vision and Sea
Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the Sea. In addition to that, National Vision is 1.36 times more volatile than Sea. It trades about -0.05 of its total potential returns per unit of risk. Sea is currently generating about 0.22 per unit of volatility. If you would invest 3,814 in Sea on August 28, 2024 and sell it today you would earn a total of 7,586 from holding Sea or generate 198.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. Sea
Performance |
| Timeline |
| National Vision Holdings |
| Sea |
National Vision and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Sea
The main advantage of trading using opposite National Vision and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
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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