Correlation Between National Vision and Stepstone
Can any of the company-specific risk be diversified away by investing in both National Vision and Stepstone 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 Stepstone 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 Stepstone Group, you can compare the effects of market volatilities on National Vision and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Stepstone.
Diversification Opportunities for National Vision and Stepstone
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Stepstone is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of National Vision i.e., National Vision and Stepstone go up and down completely randomly.
Pair Corralation between National Vision and Stepstone
Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the Stepstone. In addition to that, National Vision is 1.49 times more volatile than Stepstone Group. It trades about -0.03 of its total potential returns per unit of risk. Stepstone Group is currently generating about 0.12 per unit of volatility. If you would invest 2,813 in Stepstone Group on September 12, 2024 and sell it today you would earn a total of 3,347 from holding Stepstone Group or generate 118.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. Stepstone Group
Performance |
| Timeline |
| National Vision Holdings |
| Stepstone Group |
National Vision and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Stepstone
The main advantage of trading using opposite National Vision and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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