Correlation Between Ameren Illinois and AGNC Investment
Can any of the company-specific risk be diversified away by investing in both Ameren Illinois and AGNC Investment 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 Illinois and AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameren Illinois and AGNC Investment Corp, you can compare the effects of market volatilities on Ameren Illinois and AGNC Investment 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 Illinois with a short position of AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameren Illinois and AGNC Investment.
Diversification Opportunities for Ameren Illinois and AGNC Investment
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ameren and AGNC is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ameren Illinois and AGNC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC Investment Corp and Ameren Illinois 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 Illinois are associated (or correlated) with AGNC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC Investment Corp has no effect on the direction of Ameren Illinois i.e., Ameren Illinois and AGNC Investment go up and down completely randomly.
Pair Corralation between Ameren Illinois and AGNC Investment
Assuming the 90 days horizon Ameren Illinois is expected to generate 1.54 times less return on investment than AGNC Investment. In addition to that, Ameren Illinois is 3.6 times more volatile than AGNC Investment Corp. It trades about 0.01 of its total potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.08 per unit of volatility. 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 Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ameren Illinois vs. AGNC Investment Corp
Performance |
| Timeline |
| Ameren Illinois |
| AGNC Investment Corp |
Ameren Illinois and AGNC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameren Illinois and AGNC Investment
The main advantage of trading using opposite Ameren Illinois and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameren Illinois position performs unexpectedly, AGNC Investment 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 AGNC Investment will offset losses from the drop in AGNC Investment's long position.| Ameren Illinois vs. Nok Airlines Public | Ameren Illinois vs. Assurant | Ameren Illinois vs. Volaris | Ameren Illinois vs. Direct Line Insurance |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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