Correlation Between Vistra Energy and Huaneng Power
Can any of the company-specific risk be diversified away by investing in both Vistra Energy and Huaneng Power 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 Huaneng Power 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 Huaneng Power International, you can compare the effects of market volatilities on Vistra Energy and Huaneng Power 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 Huaneng Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vistra Energy and Huaneng Power.
Diversification Opportunities for Vistra Energy and Huaneng Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vistra and Huaneng is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vistra Energy Corp and Huaneng Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaneng Power Intern 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 Huaneng Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaneng Power Intern has no effect on the direction of Vistra Energy i.e., Vistra Energy and Huaneng Power go up and down completely randomly.
Pair Corralation between Vistra Energy and Huaneng Power
Considering the 90-day investment horizon Vistra Energy is expected to generate 2.74 times less return on investment than Huaneng Power. But when comparing it to its historical volatility, Vistra Energy Corp is 3.82 times less risky than Huaneng Power. It trades about 0.11 of its potential returns per unit of risk. Huaneng Power International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 44.00 in Huaneng Power International on August 24, 2024 and sell it today you would earn a total of 6.00 from holding Huaneng Power International or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vistra Energy Corp vs. Huaneng Power International
Performance |
| Timeline |
| Vistra Energy Corp |
| Huaneng Power Intern |
Vistra Energy and Huaneng Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vistra Energy and Huaneng Power
The main advantage of trading using opposite Vistra Energy and Huaneng Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vistra Energy position performs unexpectedly, Huaneng Power 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 Huaneng Power will offset losses from the drop in Huaneng Power's long position.| Vistra Energy vs. Pampa Energia SA | Vistra Energy vs. TransAlta Corp | Vistra Energy vs. Kenon Holdings | Vistra Energy vs. NRG Energy |
| Huaneng Power vs. Powertap Hydrogen Capital | Huaneng Power vs. Clearway Energy | Huaneng Power vs. Fusion Fuel Green | Huaneng Power vs. Orsted AS ADR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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