Correlation Between National Vision and MarineMax

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

Diversification Opportunities for National Vision and MarineMax

0.27

Correlation Coefficient

National Vision  MarineMax

Modest diversification

The 3 months correlation between National and MarineMax is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and MarineMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarineMax 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 MarineMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MarineMax has no effect on the direction of National Vision i.e., National Vision and MarineMax go up and down completely randomly.

Pair Corralation between National Vision and MarineMax

Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the MarineMax. But the stock apears to be less risky and, when comparing its historical volatility, National Vision Holdings is 1.22 times less risky than MarineMax. The stock trades about -0.37 of its potential returns per unit of risk. The MarineMax is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  3,002  in MarineMax on January 19, 2024 and sell it today you would lose (296.00) from holding MarineMax or give up 9.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

National Vision Holdings  vs.  MarineMax

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 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.

MarineMax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MarineMax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with National Vision and MarineMax

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

The idea behind National Vision Holdings and MarineMax 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.