Correlation Between AGNC Investment and Ameren Illinois
Can any of the company-specific risk be diversified away by investing in both AGNC Investment and Ameren Illinois 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 AGNC Investment and Ameren Illinois into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC Investment Corp and Ameren Illinois, you can compare the effects of market volatilities on AGNC Investment and Ameren Illinois 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 AGNC Investment with a short position of Ameren Illinois. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC Investment and Ameren Illinois.
Diversification Opportunities for AGNC Investment and Ameren Illinois
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between AGNC and Ameren is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding AGNC Investment Corp and Ameren Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Illinois and AGNC Investment 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 AGNC Investment Corp are associated (or correlated) with Ameren Illinois. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameren Illinois has no effect on the direction of AGNC Investment i.e., AGNC Investment and Ameren Illinois go up and down completely randomly.
Pair Corralation between AGNC Investment and Ameren Illinois
Assuming the 90 days horizon AGNC Investment Corp is expected to generate 0.34 times more return on investment than Ameren Illinois. However, AGNC Investment Corp is 2.95 times less risky than Ameren Illinois. It trades about 0.08 of its potential returns per unit of risk. Ameren Illinois is currently generating about 0.01 per unit of risk. If you would invest 2,454 in AGNC Investment Corp on September 1, 2024 and sell it today you would earn a total of 105.00 from holding AGNC Investment Corp or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGNC Investment Corp vs. Ameren Illinois
Performance |
| Timeline |
| AGNC Investment Corp |
| Ameren Illinois |
AGNC Investment and Ameren Illinois Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC Investment and Ameren Illinois
The main advantage of trading using opposite AGNC Investment and Ameren Illinois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC Investment position performs unexpectedly, Ameren Illinois 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 Ameren Illinois will offset losses from the drop in Ameren Illinois' long position.| AGNC Investment vs. ACRES Commercial Realty | AGNC Investment vs. Chimera Investment | AGNC Investment vs. Cherry Hill Mortgage |
| Ameren Illinois vs. Ameren Illinois | Ameren Illinois vs. The Connecticut Light | Ameren Illinois vs. Southern Company | Ameren Illinois vs. The Connecticut Light |
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.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |