Correlation Between National Vision and 456837AV5

Can any of the company-specific risk be diversified away by investing in both National Vision and 456837AV5 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 456837AV5 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 456837AV5 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 456837AV5. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and 456837AV5.

Diversification Opportunities for National Vision and 456837AV5

-0.02

Correlation Coefficient

National Vision  456837AV5

Good diversification

The 3 months correlation between National and 456837AV5 is -0.02. 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 456837AV5. 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 456837AV5 go up and down completely randomly.

Pair Corralation between National Vision and 456837AV5

Considering the 90-day investment horizon National Vision Holdings is expected to generate 12.98 times more return on investment than 456837AV5. However, National Vision is 12.98 times more volatile than ING GROEP NV. It trades about 0.16 of its potential returns per unit of risk. ING GROEP NV is currently generating about 0.07 per unit of risk. If you would invest  1,057  in National Vision Holdings on December 25, 2024 and sell it today you would earn a total of  304.00  from holding National Vision Holdings or generate 28.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.97%
Values	Daily Returns

National Vision Holdings  vs.  ING GROEP NV

National Vision Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in National Vision Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, National Vision exhibited solid returns over the last few months and may actually be approaching a breakup point.

ING GROEP NV

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ING GROEP NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 456837AV5 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with National Vision and 456837AV5

The main advantage of trading using opposite National Vision and 456837AV5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision position performs unexpectedly, 456837AV5 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 456837AV5 will offset losses from the drop in 456837AV5'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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.