Correlation Between Margo Caribe and National Vision

Can any of the company-specific risk be diversified away by investing in both Margo Caribe and National Vision 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 Margo Caribe and National Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Margo Caribe and National Vision Holdings, you can compare the effects of market volatilities on Margo Caribe and National Vision 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 Margo Caribe with a short position of National Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Margo Caribe and National Vision.

Diversification Opportunities for Margo Caribe and National Vision

-0.37

Correlation Coefficient

Margo Caribe  National Vision

Very good diversification

The 3 months correlation between Margo and National is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Margo Caribe and National Vision Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Vision Holdings and Margo Caribe 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 Margo Caribe are associated (or correlated) with National Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Vision Holdings has no effect on the direction of Margo Caribe i.e., Margo Caribe and National Vision go up and down completely randomly.

Pair Corralation between Margo Caribe and National Vision

If you would invest  465.00  in Margo Caribe on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Margo Caribe or generate 0.0% return on investment over 90 days.

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

Margo Caribe  vs.  National Vision Holdings

Margo Caribe

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Margo Caribe are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Margo Caribe displayed solid returns over the last few months and may actually be approaching a breakup point.

National Vision Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in National Vision Holdings are ranked lower than 6 (%) 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.

Pair Trading with Margo Caribe and National Vision

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

The idea behind Margo Caribe and National Vision Holdings 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.