Correlation Between National Vision and Miniso Group

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

Diversification Opportunities for National Vision and Miniso Group

0.36

Correlation Coefficient

National Vision  Miniso Group

Weak diversification

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

Pair Corralation between National Vision and Miniso Group

Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the Miniso Group. But the stock apears to be less risky and, when comparing its historical volatility, National Vision Holdings is 2.16 times less risky than Miniso Group. The stock trades about -0.1 of its potential returns per unit of risk. The Miniso Group Holding is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  1,690  in Miniso Group Holding on September 24, 2024 and sell it today you would earn a total of  711.50  from holding Miniso Group Holding or generate 42.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

National Vision Holdings  vs.  Miniso Group Holding

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 unfluctuating basic indicators, National Vision may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Miniso Group Holding

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Vision and Miniso Group

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

The idea behind National Vision Holdings and Miniso Group Holding 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.