Correlation Between Ameren Corp and Genie Energy
Can any of the company-specific risk be diversified away by investing in both Ameren Corp and Genie Energy 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 Genie Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameren Corp and Genie Energy, you can compare the effects of market volatilities on Ameren Corp and Genie Energy 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 Genie Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameren Corp and Genie Energy.
Diversification Opportunities for Ameren Corp and Genie Energy
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ameren and Genie is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ameren Corp and Genie Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Energy 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 Genie Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genie Energy has no effect on the direction of Ameren Corp i.e., Ameren Corp and Genie Energy go up and down completely randomly.
Pair Corralation between Ameren Corp and Genie Energy
Considering the 90-day investment horizon Ameren Corp is expected to generate 0.61 times more return on investment than Genie Energy. However, Ameren Corp is 1.65 times less risky than Genie Energy. It trades about 0.33 of its potential returns per unit of risk. Genie Energy is currently generating about -0.05 per unit of risk. If you would invest 8,601 in Ameren Corp on August 30, 2024 and sell it today you would earn a total of 897.00 from holding Ameren Corp or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameren Corp vs. Genie Energy
Performance |
| Timeline |
| Ameren Corp |
| Genie Energy |
Ameren Corp and Genie Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameren Corp and Genie Energy
The main advantage of trading using opposite Ameren Corp and Genie Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameren Corp position performs unexpectedly, Genie Energy 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 Genie Energy will offset losses from the drop in Genie Energy's long position.| Ameren Corp vs. Alliant Energy Corp | Ameren Corp vs. Exelon | Ameren Corp vs. Evergy, | Ameren Corp vs. Pinnacle West Capital |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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