Correlation Between Vistra Energy and Esperion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Vistra Energy and Esperion Therapeutics 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 Esperion Therapeutics 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 Esperion Therapeutics, you can compare the effects of market volatilities on Vistra Energy and Esperion Therapeutics 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 Esperion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vistra Energy and Esperion Therapeutics.
Diversification Opportunities for Vistra Energy and Esperion Therapeutics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vistra and Esperion is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vistra Energy Corp and Esperion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esperion Therapeutics 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 Esperion Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esperion Therapeutics has no effect on the direction of Vistra Energy i.e., Vistra Energy and Esperion Therapeutics go up and down completely randomly.
Pair Corralation between Vistra Energy and Esperion Therapeutics
Considering the 90-day investment horizon Vistra Energy Corp is expected to generate 0.84 times more return on investment than Esperion Therapeutics. However, Vistra Energy Corp is 1.19 times less risky than Esperion Therapeutics. It trades about 0.31 of its potential returns per unit of risk. Esperion Therapeutics is currently generating about 0.16 per unit of risk. If you would invest 7,556 in Vistra Energy Corp on September 2, 2024 and sell it today you would earn a total of 8,428 from holding Vistra Energy Corp or generate 111.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vistra Energy Corp vs. Esperion Therapeutics
Performance |
| Timeline |
| Vistra Energy Corp |
| Esperion Therapeutics |
Vistra Energy and Esperion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vistra Energy and Esperion Therapeutics
The main advantage of trading using opposite Vistra Energy and Esperion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vistra Energy position performs unexpectedly, Esperion Therapeutics 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 Esperion Therapeutics will offset losses from the drop in Esperion Therapeutics' long position.| Vistra Energy vs. Pampa Energia SA | Vistra Energy vs. TransAlta Corp | Vistra Energy vs. Power Assets Holdings |
| Esperion Therapeutics vs. Elanco Animal Health | Esperion Therapeutics vs. SIGA Technologies | Esperion Therapeutics vs. Catalent | Esperion Therapeutics vs. ANI Pharmaceuticals |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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