Correlation Between National Vision and EVgo Equity

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

Diversification Opportunities for National Vision and EVgo Equity

-0.36

Correlation Coefficient

National Vision  EVgo Equity

Very good diversification

The 3 months correlation between National and EVgo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and EVgo Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVgo Equity Warrants 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 EVgo Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVgo Equity Warrants has no effect on the direction of National Vision i.e., National Vision and EVgo Equity go up and down completely randomly.

Pair Corralation between National Vision and EVgo Equity

Considering the 90-day investment horizon National Vision Holdings is expected to generate 0.33 times more return on investment than EVgo Equity. However, National Vision Holdings is 3.0 times less risky than EVgo Equity. It trades about -0.22 of its potential returns per unit of risk. EVgo Equity Warrants is currently generating about -0.23 per unit of risk. If you would invest  1,245  in National Vision Holdings on September 27, 2024 and sell it today you would lose (143.00) from holding National Vision Holdings or give up 11.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

National Vision Holdings  vs.  EVgo Equity Warrants

National Vision Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Vision Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, National Vision is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

EVgo Equity Warrants

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EVgo Equity Warrants are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, EVgo Equity showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Vision and EVgo Equity

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

The idea behind National Vision Holdings and EVgo Equity Warrants 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.