Correlation Between National Vision and Samfine Creation

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

Diversification Opportunities for National Vision and Samfine Creation

0.38

Correlation Coefficient

National Vision  Samfine Creation

Weak diversification

The 3 months correlation between National and Samfine is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Samfine Creation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samfine Creation Holdings 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 Samfine Creation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samfine Creation Holdings has no effect on the direction of National Vision i.e., National Vision and Samfine Creation go up and down completely randomly.

Pair Corralation between National Vision and Samfine Creation

Considering the 90-day investment horizon National Vision is expected to generate 3.15 times less return on investment than Samfine Creation. But when comparing it to its historical volatility, National Vision Holdings is 8.2 times less risky than Samfine Creation. It trades about 0.03 of its potential returns per unit of risk. Samfine Creation Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  530.00  in Samfine Creation Holdings on September 17, 2024 and sell it today you would lose (413.00) from holding Samfine Creation Holdings or give up 77.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	67.69%
Values	Daily Returns

National Vision Holdings  vs.  Samfine Creation Holdings

National Vision Holdings

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National Vision Holdings are ranked lower than 2 (%) 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.

Samfine Creation Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samfine Creation Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady technical indicators, Samfine Creation reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Vision and Samfine Creation

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

The idea behind National Vision Holdings and Samfine Creation 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.