Correlation Between Vistra Corp and SIEMENS ENERGY
Can any of the company-specific risk be diversified away by investing in both Vistra Corp and SIEMENS 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 Vistra Corp and SIEMENS ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vistra Corp and SIEMENS ENERGY AG, you can compare the effects of market volatilities on Vistra Corp and SIEMENS 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 Vistra Corp with a short position of SIEMENS ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vistra Corp and SIEMENS ENERGY.
Diversification Opportunities for Vistra Corp and SIEMENS ENERGY
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vistra and SIEMENS is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vistra Corp and SIEMENS ENERGY AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS ENERGY AG and Vistra Corp 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 Corp are associated (or correlated) with SIEMENS ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS ENERGY AG has no effect on the direction of Vistra Corp i.e., Vistra Corp and SIEMENS ENERGY go up and down completely randomly.
Pair Corralation between Vistra Corp and SIEMENS ENERGY
Assuming the 90 days horizon Vistra Corp is expected to generate 1.07 times less return on investment than SIEMENS ENERGY. In addition to that, Vistra Corp is 1.28 times more volatile than SIEMENS ENERGY AG. It trades about 0.32 of its total potential returns per unit of risk. SIEMENS ENERGY AG is currently generating about 0.44 per unit of volatility. If you would invest 3,680 in SIEMENS ENERGY AG on August 29, 2024 and sell it today you would earn a total of 1,280 from holding SIEMENS ENERGY AG or generate 34.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vistra Corp vs. SIEMENS ENERGY AG
Performance |
| Timeline |
| Vistra Corp |
| SIEMENS ENERGY AG |
Vistra Corp and SIEMENS ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vistra Corp and SIEMENS ENERGY
The main advantage of trading using opposite Vistra Corp and SIEMENS ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vistra Corp position performs unexpectedly, SIEMENS 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 SIEMENS ENERGY will offset losses from the drop in SIEMENS ENERGY's long position.| Vistra Corp vs. CN YANGTPWR GDR | Vistra Corp vs. Datang International Power | Vistra Corp vs. Superior Plus Corp | Vistra Corp vs. SIVERS SEMICONDUCTORS AB |
| SIEMENS ENERGY vs. CN YANGTPWR GDR | SIEMENS ENERGY vs. Datang International Power | SIEMENS ENERGY vs. Superior Plus Corp | SIEMENS ENERGY vs. SIVERS SEMICONDUCTORS AB |
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 the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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