Correlation Between Visa and Ameren Illinois
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Ameren Illinois into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Ameren Illinois, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Ameren Illinois. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Ameren Illinois.
Diversification Opportunities for Visa and Ameren Illinois
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Ameren is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ameren Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Illinois and Visa 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 Visa Class A 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 Visa i.e., Visa and Ameren Illinois go up and down completely randomly.
Pair Corralation between Visa and Ameren Illinois
Taking into account the 90-day investment horizon Visa is expected to generate 5.23 times less return on investment than Ameren Illinois. But when comparing it to its historical volatility, Visa Class A is 1.85 times less risky than Ameren Illinois. It trades about 0.06 of its potential returns per unit of risk. Ameren Illinois is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,591 in Ameren Illinois on October 25, 2024 and sell it today you would earn a total of 309.00 from holding Ameren Illinois or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Visa Class A vs. Ameren Illinois
Performance |
| Timeline |
| Visa Class A |
| Ameren Illinois |
Visa and Ameren Illinois Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Ameren Illinois
The main advantage of trading using opposite Visa and Ameren Illinois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Ameren Illinois vs. Spyre Therapeutics | Ameren Illinois vs. Viemed Healthcare | Ameren Illinois vs. Nippon Steel Corp | Ameren Illinois vs. Neogen |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |