Correlation Between 05684BAC1 and Vistra Energy

Can any of the company-specific risk be diversified away by investing in both 05684BAC1 and Vistra Energy 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 05684BAC1 and Vistra Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BCSF 255 13 OCT 26 and Vistra Energy Corp, you can compare the effects of market volatilities on 05684BAC1 and Vistra Energy 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 05684BAC1 with a short position of Vistra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of 05684BAC1 and Vistra Energy.

Diversification Opportunities for 05684BAC1 and Vistra Energy

-0.21

Correlation Coefficient

05684BAC1  Vistra Energy

Very good diversification

The 3 months correlation between 05684BAC1 and Vistra is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding BCSF 255 13 OCT 26 and Vistra Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vistra Energy Corp and 05684BAC1 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 BCSF 255 13 OCT 26 are associated (or correlated) with Vistra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vistra Energy Corp has no effect on the direction of 05684BAC1 i.e., 05684BAC1 and Vistra Energy go up and down completely randomly.

Pair Corralation between 05684BAC1 and Vistra Energy

Assuming the 90 days trading horizon BCSF 255 13 OCT 26 is expected to under-perform the Vistra Energy. But the bond apears to be less risky and, when comparing its historical volatility, BCSF 255 13 OCT 26 is 9.44 times less risky than Vistra Energy. The bond trades about -0.08 of its potential returns per unit of risk. The Vistra Energy Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  8,535  in Vistra Energy Corp on September 13, 2024 and sell it today you would earn a total of  5,977  from holding Vistra Energy Corp or generate 70.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

BCSF 255 13 OCT 26  vs.  Vistra Energy Corp

BCSF 255 13

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCSF 255 13 OCT 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 05684BAC1 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Vistra Energy Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vistra Energy Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Vistra Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 05684BAC1 and Vistra Energy

The main advantage of trading using opposite 05684BAC1 and Vistra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 05684BAC1 position performs unexpectedly, Vistra Energy 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 Vistra Energy will offset losses from the drop in Vistra Energy's long position.

The idea behind BCSF 255 13 OCT 26 and Vistra Energy Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.