Correlation Between Vistra Energy and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Vistra Energy and FTAI Aviation 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 FTAI Aviation 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 FTAI Aviation Ltd, you can compare the effects of market volatilities on Vistra Energy and FTAI Aviation 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 FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vistra Energy and FTAI Aviation.
Diversification Opportunities for Vistra Energy and FTAI Aviation
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vistra and FTAI is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Vistra Energy Corp and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation 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 FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of Vistra Energy i.e., Vistra Energy and FTAI Aviation go up and down completely randomly.
Pair Corralation between Vistra Energy and FTAI Aviation
Considering the 90-day investment horizon Vistra Energy Corp is expected to generate 3.75 times more return on investment than FTAI Aviation. However, Vistra Energy is 3.75 times more volatile than FTAI Aviation Ltd. It trades about 0.27 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.13 per unit of risk. If you would invest 12,411 in Vistra Energy Corp on August 31, 2024 and sell it today you would earn a total of 3,041 from holding Vistra Energy Corp or generate 24.5% 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. FTAI Aviation Ltd
Performance |
| Timeline |
| Vistra Energy Corp |
| FTAI Aviation |
Vistra Energy and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vistra Energy and FTAI Aviation
The main advantage of trading using opposite Vistra Energy and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vistra Energy position performs unexpectedly, FTAI Aviation 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 FTAI Aviation will offset losses from the drop in FTAI Aviation's long position.| Vistra Energy vs. Pampa Energia SA | Vistra Energy vs. TransAlta Corp | Vistra Energy vs. Kenon Holdings | Vistra Energy vs. NRG Energy |
| FTAI Aviation vs. Commonwealth Bank of | FTAI Aviation vs. East Africa Metals | FTAI Aviation vs. Arrow Financial | FTAI Aviation vs. LithiumBank Resources Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |