Correlation Between Dicks Sporting and National Vision

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Can any of the company-specific risk be diversified away by investing in both Dicks Sporting 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 Dicks Sporting and National Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicks Sporting Goods and National Vision Holdings, you can compare the effects of market volatilities on Dicks Sporting 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 Dicks Sporting with a short position of National Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicks Sporting and National Vision.

Diversification Opportunities for Dicks Sporting and National Vision

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Dicks and National is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dicks Sporting Goods 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 Dicks Sporting 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 Dicks Sporting Goods 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 Dicks Sporting i.e., Dicks Sporting and National Vision go up and down completely randomly.

Pair Corralation between Dicks Sporting and National Vision

Considering the 90-day investment horizon Dicks Sporting is expected to generate 6.03 times less return on investment than National Vision. But when comparing it to its historical volatility, Dicks Sporting Goods is 1.19 times less risky than National Vision. It trades about 0.02 of its potential returns per unit of risk. National Vision Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,790  in National Vision Holdings on March 27, 2022 and sell it today you would earn a total of  191.00  from holding National Vision Holdings or generate 6.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Dicks Sporting Goods  vs.  National Vision Holdings

 Performance (%) 
      Timeline 
Dicks Sporting Goods 
Dicks Performance
0 of 100
Over the last 90 days Dicks Sporting Goods has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in July 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0258
Payout Ratio
0.41
Last Split Factor
2:1
Forward Annual Dividend Rate
1.95
Dividend Date
2022-06-24
Ex Dividend Date
2022-06-09
Last Split Date
2007-10-22

Dicks Price Channel

National Vision Holdings 
National Performance
0 of 100
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 conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

National Price Channel

Dicks Sporting and National Vision Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Dicks Sporting and National Vision

The main advantage of trading using opposite Dicks Sporting and National Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicks Sporting 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.

Dicks Sporting Goods

Pair trading matchups for Dicks Sporting

The idea behind Dicks Sporting Goods 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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