Correlation Between National Vision and Winmark
Can any of the company-specific risk be diversified away by investing in both National Vision and Winmark 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 Winmark 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 Winmark, you can compare the effects of market volatilities on National Vision and Winmark 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 Winmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Winmark.
Diversification Opportunities for National Vision and Winmark
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Winmark is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Winmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winmark 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 Winmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winmark has no effect on the direction of National Vision i.e., National Vision and Winmark go up and down completely randomly.
Pair Corralation between National Vision and Winmark
Considering the 90-day investment horizon National Vision Holdings is expected to generate 1.41 times more return on investment than Winmark. However, National Vision is 1.41 times more volatile than Winmark. It trades about 0.3 of its potential returns per unit of risk. Winmark is currently generating about 0.17 per unit of risk. If you would invest 968.00 in National Vision Holdings on August 23, 2024 and sell it today you would earn a total of 187.00 from holding National Vision Holdings or generate 19.32% 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. Winmark
Performance |
| Timeline |
| National Vision Holdings |
| Winmark |
National Vision and Winmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Winmark
The main advantage of trading using opposite National Vision and Winmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, Winmark 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 Winmark will offset losses from the drop in Winmark's long position.| National Vision vs. Sally Beauty Holdings | National Vision vs. MarineMax | National Vision vs. Sportsmans | National Vision vs. 1 800 FLOWERSCOM |
| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill Investment |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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