Correlation Between Ameren Corp and Icon Utilities

Can any of the company-specific risk be diversified away by investing in both Ameren Corp and Icon Utilities 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 Ameren Corp and Icon Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ameren Corp and Icon Utilities And, you can compare the effects of market volatilities on Ameren Corp and Icon Utilities 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 Ameren Corp with a short position of Icon Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameren Corp and Icon Utilities.

Diversification Opportunities for Ameren Corp and Icon Utilities

0.94

Correlation Coefficient

Ameren Corp  Icon Utilities

Almost no diversification

The 3 months correlation between Ameren and Icon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ameren Corp and Icon Utilities And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Utilities And and Ameren Corp 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 Ameren Corp are associated (or correlated) with Icon Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Utilities And has no effect on the direction of Ameren Corp i.e., Ameren Corp and Icon Utilities go up and down completely randomly.

Pair Corralation between Ameren Corp and Icon Utilities

Considering the 90-day investment horizon Ameren Corp is expected to generate 1.37 times more return on investment than Icon Utilities. However, Ameren Corp is 1.37 times more volatile than Icon Utilities And. It trades about 0.14 of its potential returns per unit of risk. Icon Utilities And is currently generating about 0.17 per unit of risk. If you would invest  8,898  in Ameren Corp on December 28, 2024 and sell it today you would earn a total of  965.00  from holding Ameren Corp or generate 10.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Ameren Corp  vs.  Icon Utilities And

Ameren Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ameren Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Ameren Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Icon Utilities And

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Utilities And are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Icon Utilities may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ameren Corp and Icon Utilities

The main advantage of trading using opposite Ameren Corp and Icon Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameren Corp position performs unexpectedly, Icon Utilities 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 Icon Utilities will offset losses from the drop in Icon Utilities' long position.

The idea behind Ameren Corp and Icon Utilities And pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.