Correlation Between Vistra Energy and AltaGas
Can any of the company-specific risk be diversified away by investing in both Vistra Energy and AltaGas 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 AltaGas 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 AltaGas, you can compare the effects of market volatilities on Vistra Energy and AltaGas 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 AltaGas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vistra Energy and AltaGas.
Diversification Opportunities for Vistra Energy and AltaGas
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vistra and AltaGas is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vistra Energy Corp and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas 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 AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of Vistra Energy i.e., Vistra Energy and AltaGas go up and down completely randomly.
Pair Corralation between Vistra Energy and AltaGas
Considering the 90-day investment horizon Vistra Energy Corp is expected to generate 3.4 times more return on investment than AltaGas. However, Vistra Energy is 3.4 times more volatile than AltaGas. It trades about 0.3 of its potential returns per unit of risk. AltaGas is currently generating about -0.02 per unit of risk. If you would invest 12,778 in Vistra Energy Corp on August 29, 2024 and sell it today you would earn a total of 3,488 from holding Vistra Energy Corp or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vistra Energy Corp vs. AltaGas
Performance |
| Timeline |
| Vistra Energy Corp |
| AltaGas |
Vistra Energy and AltaGas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vistra Energy and AltaGas
The main advantage of trading using opposite Vistra Energy and AltaGas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vistra Energy position performs unexpectedly, AltaGas 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 AltaGas will offset losses from the drop in AltaGas' long position.| Vistra Energy vs. Pampa Energia SA | Vistra Energy vs. TransAlta Corp | Vistra Energy vs. Kenon Holdings | Vistra Energy vs. NRG Energy |
| AltaGas vs. TransAlta Corp | AltaGas vs. Pampa Energia SA | AltaGas vs. Vistra Energy Corp | AltaGas vs. NRG Energy |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |