Correlation Between Vistra Energy and Unum

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

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

Diversification Opportunities for Vistra Energy and Unum

-0.03

Correlation Coefficient

Vistra Energy  Unum

Good diversification

The 3 months correlation between Vistra and Unum is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Vistra Energy Corp and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group and Vistra Energy 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 Vistra Energy Corp are associated (or correlated) with Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Vistra Energy i.e., Vistra Energy and Unum go up and down completely randomly.

Pair Corralation between Vistra Energy and Unum

Considering the 90-day investment horizon Vistra Energy Corp is expected to under-perform the Unum. In addition to that, Vistra Energy is 7.3 times more volatile than Unum Group. It trades about -0.2 of its total potential returns per unit of risk. Unum Group is currently generating about -0.57 per unit of volatility. If you would invest  2,529  in Unum Group on September 30, 2024 and sell it today you would lose (121.00) from holding Unum Group or give up 4.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vistra Energy Corp  vs.  Unum Group

Vistra Energy Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vistra Energy Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Vistra Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Unum Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unum Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Unum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vistra Energy and Unum

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

The idea behind Vistra Energy Corp and Unum Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.