Correlation Between Grupo Carso and National Vision

Can any of the company-specific risk be diversified away by investing in both Grupo Carso and National Vision 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 Grupo Carso and National Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grupo Carso SAB and National Vision Holdings, you can compare the effects of market volatilities on Grupo Carso and National Vision 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 Grupo Carso with a short position of National Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and National Vision.

Diversification Opportunities for Grupo Carso and National Vision

-0.07

Correlation Coefficient

Grupo Carso  National Vision

Good diversification

The 3 months correlation between Grupo and National is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and National Vision Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Vision Holdings and Grupo Carso 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 Grupo Carso SAB are associated (or correlated) with National Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Vision Holdings has no effect on the direction of Grupo Carso i.e., Grupo Carso and National Vision go up and down completely randomly.

Pair Corralation between Grupo Carso and National Vision

Assuming the 90 days horizon Grupo Carso SAB is expected to generate 1.12 times more return on investment than National Vision. However, Grupo Carso is 1.12 times more volatile than National Vision Holdings. It trades about 0.05 of its potential returns per unit of risk. National Vision Holdings is currently generating about -0.05 per unit of risk. If you would invest  321.00  in Grupo Carso SAB on October 24, 2024 and sell it today you would earn a total of  209.00  from holding Grupo Carso SAB or generate 65.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.76%
Values	Daily Returns

Grupo Carso SAB  vs.  National Vision Holdings

Grupo Carso SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Grupo Carso is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

National Vision Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Vision Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, National Vision unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Carso and National Vision

The main advantage of trading using opposite Grupo Carso and National Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso position performs unexpectedly, National Vision 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 National Vision will offset losses from the drop in National Vision's long position.

The idea behind Grupo Carso SAB and National Vision Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.