Correlation Between Puma SE and Ameren Illinois
Can any of the company-specific risk be diversified away by investing in both Puma SE 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 Puma SE and Ameren Illinois into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma SE and Ameren Illinois, you can compare the effects of market volatilities on Puma SE 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 Puma SE with a short position of Ameren Illinois. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma SE and Ameren Illinois.
Diversification Opportunities for Puma SE and Ameren Illinois
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Puma and Ameren is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Puma SE and Ameren Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Illinois and Puma SE 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 Puma SE 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 Puma SE i.e., Puma SE and Ameren Illinois go up and down completely randomly.
Pair Corralation between Puma SE and Ameren Illinois
Assuming the 90 days horizon Puma SE is expected to generate 1.31 times more return on investment than Ameren Illinois. However, Puma SE is 1.31 times more volatile than Ameren Illinois. It trades about 0.01 of its potential returns per unit of risk. Ameren Illinois is currently generating about 0.0 per unit of risk. If you would invest 5,590 in Puma SE on September 3, 2024 and sell it today you would lose (900.00) from holding Puma SE or give up 16.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.38% |
| Values | Daily Returns |
Puma SE vs. Ameren Illinois
Performance |
| Timeline |
| Puma SE |
| Ameren Illinois |
Puma SE and Ameren Illinois Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma SE and Ameren Illinois
The main advantage of trading using opposite Puma SE and Ameren Illinois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma SE 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.| Puma SE vs. Asics Corp ADR | Puma SE vs. Samsonite International SA | Puma SE vs. Adidas AG ADR | Puma SE vs. Wolverine World Wide |
| Ameren Illinois vs. Tat Techno | Ameren Illinois vs. Apple Inc | Ameren Illinois vs. MGM Resorts International | Ameren Illinois vs. ATT Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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