Correlation Between Vistra Energy and Bayport International
Can any of the company-specific risk be diversified away by investing in both Vistra Energy and Bayport International 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 Bayport International 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 Bayport International Holdings, you can compare the effects of market volatilities on Vistra Energy and Bayport International 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 Bayport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vistra Energy and Bayport International.
Diversification Opportunities for Vistra Energy and Bayport International
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vistra and Bayport is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Vistra Energy Corp and Bayport International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayport International 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 Bayport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayport International has no effect on the direction of Vistra Energy i.e., Vistra Energy and Bayport International go up and down completely randomly.
Pair Corralation between Vistra Energy and Bayport International
Considering the 90-day investment horizon Vistra Energy Corp is expected to generate 0.8 times more return on investment than Bayport International. However, Vistra Energy Corp is 1.24 times less risky than Bayport International. It trades about 0.15 of its potential returns per unit of risk. Bayport International Holdings is currently generating about -0.01 per unit of risk. If you would invest 4,283 in Vistra Energy Corp on November 2, 2024 and sell it today you would earn a total of 12,520 from holding Vistra Energy Corp or generate 292.32% 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. Bayport International Holdings
Performance |
| Timeline |
| Vistra Energy Corp |
| Bayport International |
Vistra Energy and Bayport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vistra Energy and Bayport International
The main advantage of trading using opposite Vistra Energy and Bayport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vistra Energy position performs unexpectedly, Bayport International 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 Bayport International will offset losses from the drop in Bayport International's long position.| Vistra Energy vs. Pampa Energia SA | Vistra Energy vs. TransAlta Corp | Vistra Energy vs. Kenon Holdings | Vistra Energy vs. NRG Energy |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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