Correlation Between Vistra Energy and Analog Devices
Can any of the company-specific risk be diversified away by investing in both Vistra Energy and Analog Devices 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 Analog Devices 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 Analog Devices, you can compare the effects of market volatilities on Vistra Energy and Analog Devices 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 Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vistra Energy and Analog Devices.
Diversification Opportunities for Vistra Energy and Analog Devices
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vistra and Analog is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vistra Energy Corp and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices 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 Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Vistra Energy i.e., Vistra Energy and Analog Devices go up and down completely randomly.
Pair Corralation between Vistra Energy and Analog Devices
Considering the 90-day investment horizon Vistra Energy Corp is expected to generate 3.84 times more return on investment than Analog Devices. However, Vistra Energy is 3.84 times more volatile than Analog Devices. It trades about 0.07 of its potential returns per unit of risk. Analog Devices is currently generating about -0.05 per unit of risk. If you would invest 15,391 in Vistra Energy Corp on November 3, 2024 and sell it today you would earn a total of 1,412 from holding Vistra Energy Corp or generate 9.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vistra Energy Corp vs. Analog Devices
Performance |
| Timeline |
| Vistra Energy Corp |
| Analog Devices |
Vistra Energy and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vistra Energy and Analog Devices
The main advantage of trading using opposite Vistra Energy and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vistra Energy position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| Vistra Energy vs. Pampa Energia SA | Vistra Energy vs. TransAlta Corp | Vistra Energy vs. Kenon Holdings | Vistra Energy vs. NRG Energy |
| Analog Devices vs. First Solar | Analog Devices vs. Sunrun Inc | Analog Devices vs. Canadian Solar | Analog Devices vs. SolarEdge Technologies |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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