Correlation Between National Vision and Beyond

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

Diversification Opportunities for National Vision and Beyond

0.88

Correlation Coefficient

National Vision  Beyond

Very poor diversification

The 3 months correlation between National and Beyond is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Beyond Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Inc 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 Beyond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Inc has no effect on the direction of National Vision i.e., National Vision and Beyond go up and down completely randomly.

Pair Corralation between National Vision and Beyond

Considering the 90-day investment horizon National Vision Holdings is expected to generate 0.78 times more return on investment than Beyond. However, National Vision Holdings is 1.29 times less risky than Beyond. It trades about -0.36 of its potential returns per unit of risk. Beyond Inc is currently generating about -0.73 per unit of risk. If you would invest  2,157  in National Vision Holdings on January 29, 2024 and sell it today you would lose (369.00) from holding National Vision Holdings or give up 17.11% of portfolio value over 90 days.

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

National Vision Holdings  vs.  Beyond Inc

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 latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Beyond Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beyond Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Beyond is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with National Vision and Beyond

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

The idea behind National Vision Holdings and Beyond Inc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.