Correlation Between WORK Medical and Vistra Energy

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

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

Diversification Opportunities for WORK Medical and Vistra Energy

-0.49

Correlation Coefficient

WORK Medical  Vistra Energy

Very good diversification

The 3 months correlation between WORK and Vistra is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding WORK Medical Technology 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 WORK Medical 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 WORK Medical Technology 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 WORK Medical i.e., WORK Medical and Vistra Energy go up and down completely randomly.

Pair Corralation between WORK Medical and Vistra Energy

Considering the 90-day investment horizon WORK Medical is expected to generate 16.53 times less return on investment than Vistra Energy. In addition to that, WORK Medical is 1.49 times more volatile than Vistra Energy Corp. It trades about 0.02 of its total potential returns per unit of risk. Vistra Energy Corp is currently generating about 0.42 per unit of volatility. If you would invest  14,411  in Vistra Energy Corp on October 26, 2024 and sell it today you would earn a total of  4,722  from holding Vistra Energy Corp or generate 32.76% return on investment over 90 days.

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

WORK Medical Technology  vs.  Vistra Energy Corp

WORK Medical Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WORK Medical Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Vistra Energy Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vistra Energy Corp are ranked lower than 15 (%) 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.

Pair Trading with WORK Medical and Vistra Energy

The main advantage of trading using opposite WORK Medical and Vistra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WORK Medical 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 WORK Medical Technology 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..