Correlation Between Wheaton Precious and Ameren Corp
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Ameren Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Ameren Corp, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Ameren Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Ameren Corp.
Diversification Opportunities for Wheaton Precious and Ameren Corp
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wheaton and Ameren is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Ameren Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Corp and Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Ameren Corp go up and down completely randomly.
Pair Corralation between Wheaton Precious and Ameren Corp
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to under-perform the Ameren Corp. In addition to that, Wheaton Precious is 2.13 times more volatile than Ameren Corp. It trades about -0.09 of its total potential returns per unit of risk. Ameren Corp is currently generating about -0.05 per unit of volatility. If you would invest 8,914 in Ameren Corp on October 9, 2024 and sell it today you would lose (180.00) from holding Ameren Corp or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Ameren Corp
Performance |
| Timeline |
| Wheaton Precious Metals |
| Ameren Corp |
Wheaton Precious and Ameren Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Ameren Corp
The main advantage of trading using opposite Wheaton Precious and Ameren Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. Givaudan SA | Wheaton Precious vs. Antofagasta PLC | Wheaton Precious vs. Ferrexpo PLC | Wheaton Precious vs. Atalaya Mining |
| Ameren Corp vs. Universal Display Corp | Ameren Corp vs. Metro Bank PLC | Ameren Corp vs. Science in Sport | Ameren Corp vs. Datagroup SE |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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