Correlation Between Vistra Energy and Companhia Paranaense
Can any of the company-specific risk be diversified away by investing in both Vistra Energy and Companhia Paranaense 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 Companhia Paranaense 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 Companhia Paranaense de, you can compare the effects of market volatilities on Vistra Energy and Companhia Paranaense 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 Companhia Paranaense. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vistra Energy and Companhia Paranaense.
Diversification Opportunities for Vistra Energy and Companhia Paranaense
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vistra and Companhia is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Vistra Energy Corp and Companhia Paranaense de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Paranaense 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 Companhia Paranaense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Paranaense has no effect on the direction of Vistra Energy i.e., Vistra Energy and Companhia Paranaense go up and down completely randomly.
Pair Corralation between Vistra Energy and Companhia Paranaense
Considering the 90-day investment horizon Vistra Energy Corp is expected to generate 2.11 times more return on investment than Companhia Paranaense. However, Vistra Energy is 2.11 times more volatile than Companhia Paranaense de. It trades about 0.4 of its potential returns per unit of risk. Companhia Paranaense de is currently generating about 0.28 per unit of risk. If you would invest 14,336 in Vistra Energy Corp on October 25, 2024 and sell it today you would earn a total of 4,350 from holding Vistra Energy Corp or generate 30.34% 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. Companhia Paranaense de
Performance |
| Timeline |
| Vistra Energy Corp |
| Companhia Paranaense |
Vistra Energy and Companhia Paranaense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vistra Energy and Companhia Paranaense
The main advantage of trading using opposite Vistra Energy and Companhia Paranaense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vistra Energy position performs unexpectedly, Companhia Paranaense 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 Companhia Paranaense will offset losses from the drop in Companhia Paranaense'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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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