Correlation Between Genuine Parts and National Vision

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

Diversification Opportunities for Genuine Parts and National Vision

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Genuine and National is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts 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 Genuine Parts 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 Genuine Parts 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 Genuine Parts i.e., Genuine Parts and National Vision go up and down completely randomly.

Pair Corralation between Genuine Parts and National Vision

Considering the 90-day investment horizon Genuine Parts is expected to generate 0.56 times more return on investment than National Vision. However, Genuine Parts is 1.77 times less risky than National Vision. It trades about 0.06 of its potential returns per unit of risk. National Vision Holdings is currently generating about 0.0 per unit of risk. If you would invest  8,934  in Genuine Parts on April 6, 2022 and sell it today you would earn a total of  4,489  from holding Genuine Parts or generate 50.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Genuine Parts  vs.  National Vision Holdings

 Performance (%) 
      Timeline 
Genuine Parts 
Genuine Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Genuine Parts are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Genuine Parts is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0268
Payout Ratio
0.47
Last Split Factor
3:2
Forward Annual Dividend Rate
3.58
Dividend Date
2022-07-01
Ex Dividend Date
2022-06-02
Last Split Date
1997-04-15

Genuine 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 August 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

National Price Channel

Genuine Parts and National Vision Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Genuine Parts and National Vision

The main advantage of trading using opposite Genuine Parts and National Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts 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 Genuine Parts 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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