Correlation Between Disney and Ameren Illinois
Can any of the company-specific risk be diversified away by investing in both Disney 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 Disney and Ameren Illinois into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Ameren Illinois, you can compare the effects of market volatilities on Disney 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 Disney with a short position of Ameren Illinois. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Ameren Illinois.
Diversification Opportunities for Disney and Ameren Illinois
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Disney and Ameren is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Ameren Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Illinois and Disney 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 Walt Disney 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 Disney i.e., Disney and Ameren Illinois go up and down completely randomly.
Pair Corralation between Disney and Ameren Illinois
Considering the 90-day investment horizon Walt Disney is expected to under-perform the Ameren Illinois. In addition to that, Disney is 5.83 times more volatile than Ameren Illinois. It trades about -0.07 of its total potential returns per unit of risk. Ameren Illinois is currently generating about -0.27 per unit of volatility. If you would invest 6,900 in Ameren Illinois on January 10, 2025 and sell it today you would lose (255.00) from holding Ameren Illinois or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. Ameren Illinois
Performance |
| Timeline |
| Walt Disney |
| Ameren Illinois |
Disney and Ameren Illinois Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Ameren Illinois
The main advantage of trading using opposite Disney and Ameren Illinois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney 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.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| Ameren Illinois vs. Engie Brasil Energia | Ameren Illinois vs. Centrais Eltricas Brasileiras | Ameren Illinois vs. Centrais Electricas Brasileiras | Ameren Illinois vs. Ameren Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |