Correlation Between Ameren Corp and United States
Can any of the company-specific risk be diversified away by investing in both Ameren Corp and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameren Corp and United States Cellular, you can compare the effects of market volatilities on Ameren Corp and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameren Corp and United States.
Diversification Opportunities for Ameren Corp and United States
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ameren and United is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ameren Corp and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of Ameren Corp i.e., Ameren Corp and United States go up and down completely randomly.
Pair Corralation between Ameren Corp and United States
Considering the 90-day investment horizon Ameren Corp is expected to generate 2.49 times more return on investment than United States. However, Ameren Corp is 2.49 times more volatile than United States Cellular. It trades about 0.19 of its potential returns per unit of risk. United States Cellular is currently generating about 0.09 per unit of risk. If you would invest 8,812 in Ameren Corp on August 28, 2024 and sell it today you would earn a total of 541.00 from holding Ameren Corp or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameren Corp vs. United States Cellular
Performance |
| Timeline |
| Ameren Corp |
| United States Cellular |
Ameren Corp and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameren Corp and United States
The main advantage of trading using opposite Ameren Corp and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameren Corp position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Ameren Corp vs. CMS Energy | Ameren Corp vs. Pinnacle West Capital | Ameren Corp vs. MGE Energy | Ameren Corp vs. Evergy, |
| United States vs. United States Cellular | United States vs. United States Cellular | United States vs. Office Properties Income | United States vs. Southern Company Series |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |