Correlation Between National Vision and 456837AM5

Can any of the company-specific risk be diversified away by investing in both National Vision and 456837AM5 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 456837AM5 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 ING Groep NV, you can compare the effects of market volatilities on National Vision and 456837AM5 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 456837AM5. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and 456837AM5.

Diversification Opportunities for National Vision and 456837AM5

-0.25

Correlation Coefficient

National Vision  456837AM5

Very good diversification

The 3 months correlation between National and 456837AM5 is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV 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 456837AM5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of National Vision i.e., National Vision and 456837AM5 go up and down completely randomly.

Pair Corralation between National Vision and 456837AM5

Considering the 90-day investment horizon National Vision Holdings is expected to generate 3.04 times more return on investment than 456837AM5. However, National Vision is 3.04 times more volatile than ING Groep NV. It trades about 0.02 of its potential returns per unit of risk. ING Groep NV is currently generating about -0.18 per unit of risk. If you would invest  1,026  in National Vision Holdings on October 3, 2024 and sell it today you would earn a total of  16.00  from holding National Vision Holdings or generate 1.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.48%
Values	Daily Returns

National Vision Holdings  vs.  ING Groep NV

National Vision Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Vision Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

ING Groep NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING Groep NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for ING Groep NV investors.

Pair Trading with National Vision and 456837AM5

The main advantage of trading using opposite National Vision and 456837AM5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, 456837AM5 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 456837AM5 will offset losses from the drop in 456837AM5's long position.

The idea behind National Vision Holdings and ING Groep NV 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.