Correlation Between 456837BF9 and Vistra Energy

Can any of the company-specific risk be diversified away by investing in both 456837BF9 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 456837BF9 and Vistra Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ING Groep 6083 and Vistra Energy Corp, you can compare the effects of market volatilities on 456837BF9 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 456837BF9 with a short position of Vistra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of 456837BF9 and Vistra Energy.

Diversification Opportunities for 456837BF9 and Vistra Energy

-0.54

Correlation Coefficient

456837BF9  Vistra Energy

Excellent diversification

The 3 months correlation between 456837BF9 and Vistra is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding ING Groep 6083 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 456837BF9 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 ING Groep 6083 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 456837BF9 i.e., 456837BF9 and Vistra Energy go up and down completely randomly.

Pair Corralation between 456837BF9 and Vistra Energy

Assuming the 90 days trading horizon ING Groep 6083 is expected to generate 0.02 times more return on investment than Vistra Energy. However, ING Groep 6083 is 41.13 times less risky than Vistra Energy. It trades about -0.04 of its potential returns per unit of risk. Vistra Energy Corp is currently generating about -0.09 per unit of risk. If you would invest  10,198  in ING Groep 6083 on September 21, 2024 and sell it today you would lose (7.00) from holding ING Groep 6083 or give up 0.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	77.27%
Values	Daily Returns

ING Groep 6083  vs.  Vistra Energy Corp

ING Groep 6083

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING Groep 6083 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 456837BF9 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

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vistra Energy Corp are ranked lower than 8 (%) 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 456837BF9 and Vistra Energy

The main advantage of trading using opposite 456837BF9 and Vistra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 456837BF9 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 ING Groep 6083 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.