Correlation Between Capital Metals and Ameren Corp
Can any of the company-specific risk be diversified away by investing in both Capital Metals and Ameren Corp 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 Capital Metals and Ameren Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Metals PLC and Ameren Corp, you can compare the effects of market volatilities on Capital Metals and Ameren Corp 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 Capital Metals with a short position of Ameren Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Metals and Ameren Corp.
Diversification Opportunities for Capital Metals and Ameren Corp
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and Ameren is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Capital Metals PLC and Ameren Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Corp and Capital Metals 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 Capital Metals PLC are associated (or correlated) with Ameren Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameren Corp has no effect on the direction of Capital Metals i.e., Capital Metals and Ameren Corp go up and down completely randomly.
Pair Corralation between Capital Metals and Ameren Corp
Assuming the 90 days trading horizon Capital Metals PLC is expected to under-perform the Ameren Corp. In addition to that, Capital Metals is 1.56 times more volatile than Ameren Corp. It trades about -0.22 of its total potential returns per unit of risk. Ameren Corp is currently generating about 0.39 per unit of volatility. If you would invest 8,919 in Ameren Corp on October 24, 2024 and sell it today you would earn a total of 751.00 from holding Ameren Corp or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Capital Metals PLC vs. Ameren Corp
Performance |
| Timeline |
| Capital Metals PLC |
| Ameren Corp |
Capital Metals and Ameren Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Metals and Ameren Corp
The main advantage of trading using opposite Capital Metals and Ameren Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Metals position performs unexpectedly, Ameren Corp 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 Corp will offset losses from the drop in Ameren Corp's long position.| Capital Metals vs. Infrastrutture Wireless Italiane | Capital Metals vs. G5 Entertainment AB | Capital Metals vs. Intermediate Capital Group | Capital Metals vs. AcadeMedia AB |
| Ameren Corp vs. Home Depot | Ameren Corp vs. Weiss Korea Opportunity | Ameren Corp vs. River and Mercantile | Ameren Corp vs. Chrysalis Investments |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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