Correlation Between Centrais Electricas and Ameren Illinois
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas 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 Centrais Electricas and Ameren Illinois into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrais Electricas Brasileiras and Ameren Illinois, you can compare the effects of market volatilities on Centrais Electricas 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 Centrais Electricas with a short position of Ameren Illinois. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and Ameren Illinois.
Diversification Opportunities for Centrais Electricas and Ameren Illinois
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centrais and Ameren is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and Ameren Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Illinois and Centrais Electricas 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 Centrais Electricas Brasileiras 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 Centrais Electricas i.e., Centrais Electricas and Ameren Illinois go up and down completely randomly.
Pair Corralation between Centrais Electricas and Ameren Illinois
If you would invest 618.00 in Centrais Electricas Brasileiras on November 28, 2024 and sell it today you would earn a total of 39.00 from holding Centrais Electricas Brasileiras or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. Ameren Illinois
Performance |
| Timeline |
| Centrais Electricas |
| Ameren Illinois |
Centrais Electricas and Ameren Illinois Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and Ameren Illinois
The main advantage of trading using opposite Centrais Electricas and Ameren Illinois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas 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.| Centrais Electricas vs. Genie Energy | Centrais Electricas vs. Central Puerto SA | Centrais Electricas vs. Korea Electric Power | Centrais Electricas vs. Empresa Distribuidora y |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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