Correlation Between Talen Energy and Integral

Can any of the company-specific risk be diversified away by investing in both Talen Energy and Integral 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 Talen Energy and Integral into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Talen Energy and Integral Ad Science, you can compare the effects of market volatilities on Talen Energy and Integral 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 Talen Energy with a short position of Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talen Energy and Integral.

Diversification Opportunities for Talen Energy and Integral

0.12

Correlation Coefficient

Talen Energy  Integral

Average diversification

The 3 months correlation between Talen and Integral is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Talen Energy and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science and Talen 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 Talen Energy are associated (or correlated) with Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Talen Energy i.e., Talen Energy and Integral go up and down completely randomly.

Pair Corralation between Talen Energy and Integral

Considering the 90-day investment horizon Talen Energy is expected to under-perform the Integral. In addition to that, Talen Energy is 2.32 times more volatile than Integral Ad Science. It trades about -0.06 of its total potential returns per unit of risk. Integral Ad Science is currently generating about -0.03 per unit of volatility. If you would invest  1,090  in Integral Ad Science on July 16, 2024 and sell it today you would lose (12.00) from holding Integral Ad Science or give up 1.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Talen Energy  vs.  Integral Ad Science

Talen Energy

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Talen Energy are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Talen Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Talen Energy and Integral

The main advantage of trading using opposite Talen Energy and Integral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talen Energy position performs unexpectedly, Integral 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 Integral will offset losses from the drop in Integral's long position.

The idea behind Talen Energy and Integral Ad Science pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.