Correlation Between Avista and Ameren Corp
Can any of the company-specific risk be diversified away by investing in both Avista 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 Avista and Ameren Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avista and Ameren Corp, you can compare the effects of market volatilities on Avista 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 Avista with a short position of Ameren Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avista and Ameren Corp.
Diversification Opportunities for Avista and Ameren Corp
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avista and Ameren is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Avista and Ameren Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Corp and Avista 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 Avista 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 Avista i.e., Avista and Ameren Corp go up and down completely randomly.
Pair Corralation between Avista and Ameren Corp
Considering the 90-day investment horizon Avista is expected to under-perform the Ameren Corp. In addition to that, Avista is 1.3 times more volatile than Ameren Corp. It trades about -0.04 of its total potential returns per unit of risk. Ameren Corp is currently generating about 0.07 per unit of volatility. If you would invest 9,643 in Ameren Corp on June 2, 2025 and sell it today you would earn a total of 335.00 from holding Ameren Corp or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avista vs. Ameren Corp
Performance |
| Timeline |
| Avista |
| Ameren Corp |
Avista and Ameren Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avista and Ameren Corp
The main advantage of trading using opposite Avista and Ameren Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avista 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.| Avista vs. Allete Inc | Avista vs. Black Hills | Avista vs. Montauk Renewables | Avista vs. Companhia Paranaense de |
| Ameren Corp vs. CMS Energy | Ameren Corp vs. Pinnacle West Capital | Ameren Corp vs. MGE Energy | Ameren Corp vs. Evergy, |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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