Correlation Between National Vision and Cadeler AS

Can any of the company-specific risk be diversified away by investing in both National Vision and Cadeler AS 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 Cadeler AS 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 Cadeler AS, you can compare the effects of market volatilities on National Vision and Cadeler AS 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 Cadeler AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Cadeler AS.

Diversification Opportunities for National Vision and Cadeler AS

-0.41

Correlation Coefficient

National Vision  Cadeler AS

Very good diversification

The 3 months correlation between National and Cadeler is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Cadeler AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadeler AS 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 Cadeler AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadeler AS has no effect on the direction of National Vision i.e., National Vision and Cadeler AS go up and down completely randomly.

Pair Corralation between National Vision and Cadeler AS

Considering the 90-day investment horizon National Vision Holdings is expected to generate 1.5 times more return on investment than Cadeler AS. However, National Vision is 1.5 times more volatile than Cadeler AS. It trades about 0.07 of its potential returns per unit of risk. Cadeler AS is currently generating about -0.18 per unit of risk. If you would invest  997.00  in National Vision Holdings on October 10, 2024 and sell it today you would earn a total of  93.00  from holding National Vision Holdings or generate 9.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

National Vision Holdings  vs.  Cadeler AS

National Vision Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in National Vision Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, National Vision may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cadeler AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cadeler AS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with National Vision and Cadeler AS

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

The idea behind National Vision Holdings and Cadeler AS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.