Correlation Between Ameren Corp and Companhia Paranaense
Can any of the company-specific risk be diversified away by investing in both Ameren Corp 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 Ameren Corp and Companhia Paranaense into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameren Corp and Companhia Paranaense de, you can compare the effects of market volatilities on Ameren Corp 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 Ameren Corp with a short position of Companhia Paranaense. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameren Corp and Companhia Paranaense.
Diversification Opportunities for Ameren Corp and Companhia Paranaense
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ameren and Companhia is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ameren 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 Ameren Corp 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 Ameren 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 Ameren Corp i.e., Ameren Corp and Companhia Paranaense go up and down completely randomly.
Pair Corralation between Ameren Corp and Companhia Paranaense
Considering the 90-day investment horizon Ameren Corp is expected to generate 0.57 times more return on investment than Companhia Paranaense. However, Ameren Corp is 1.74 times less risky than Companhia Paranaense. It trades about 0.03 of its potential returns per unit of risk. Companhia Paranaense de is currently generating about -0.04 per unit of risk. If you would invest 8,364 in Ameren Corp on August 30, 2024 and sell it today you would earn a total of 1,134 from holding Ameren Corp or generate 13.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 46.77% |
| Values | Daily Returns |
Ameren Corp vs. Companhia Paranaense de
Performance |
| Timeline |
| Ameren Corp |
| Companhia Paranaense |
Ameren Corp and Companhia Paranaense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameren Corp and Companhia Paranaense
The main advantage of trading using opposite Ameren Corp and Companhia Paranaense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameren Corp 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.| Ameren Corp vs. Alliant Energy Corp | Ameren Corp vs. Exelon | Ameren Corp vs. Evergy, | Ameren Corp vs. Pinnacle West Capital |
| Companhia Paranaense vs. Encore Capital Group | Companhia Paranaense vs. Chemours Co | Companhia Paranaense vs. Siriuspoint | Companhia Paranaense vs. Freedom Bank of |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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