Correlation Between Ameren Corp and Union Electric
Can any of the company-specific risk be diversified away by investing in both Ameren Corp and Union Electric 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 Union Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameren Corp and Union Electric, you can compare the effects of market volatilities on Ameren Corp and Union Electric 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 Union Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameren Corp and Union Electric.
Diversification Opportunities for Ameren Corp and Union Electric
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ameren and Union is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ameren Corp and Union Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Electric 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 Union Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Electric has no effect on the direction of Ameren Corp i.e., Ameren Corp and Union Electric go up and down completely randomly.
Pair Corralation between Ameren Corp and Union Electric
Considering the 90-day investment horizon Ameren Corp is expected to generate 15.0 times more return on investment than Union Electric. However, Ameren Corp is 15.0 times more volatile than Union Electric. It trades about 0.11 of its potential returns per unit of risk. Union Electric is currently generating about 0.25 per unit of risk. If you would invest 9,089 in Ameren Corp on October 25, 2024 and sell it today you would earn a total of 246.00 from holding Ameren Corp or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.89% |
| Values | Daily Returns |
Ameren Corp vs. Union Electric
Performance |
| Timeline |
| Ameren Corp |
| Union Electric |
Ameren Corp and Union Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameren Corp and Union Electric
The main advantage of trading using opposite Ameren Corp and Union Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameren Corp position performs unexpectedly, Union Electric 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 Union Electric will offset losses from the drop in Union Electric's long position.| Ameren Corp vs. CMS Energy | Ameren Corp vs. Pinnacle West Capital | Ameren Corp vs. MGE Energy | Ameren Corp vs. Evergy, |
| Union Electric vs. BBB Foods | Union Electric vs. Westrock Coffee | Union Electric vs. Sea | Union Electric vs. Simon Property Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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