Correlation Between Ameriprise Financial and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Eastman Chemical 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 Ameriprise Financial and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and Eastman Chemical Co, you can compare the effects of market volatilities on Ameriprise Financial and Eastman Chemical 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 Ameriprise Financial with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Eastman Chemical.
Diversification Opportunities for Ameriprise Financial and Eastman Chemical
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ameriprise and Eastman is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Ameriprise Financial 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 Ameriprise Financial are associated (or correlated) with Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Eastman Chemical go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Eastman Chemical
Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 1.48 times more return on investment than Eastman Chemical. However, Ameriprise Financial is 1.48 times more volatile than Eastman Chemical Co. It trades about 0.22 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about 0.0 per unit of risk. If you would invest 51,263 in Ameriprise Financial on August 28, 2024 and sell it today you would earn a total of 5,795 from holding Ameriprise Financial or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameriprise Financial vs. Eastman Chemical Co
Performance |
| Timeline |
| Ameriprise Financial |
| Eastman Chemical |
Ameriprise Financial and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and Eastman Chemical
The main advantage of trading using opposite Ameriprise Financial and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| Ameriprise Financial vs. Samsung Electronics Co | Ameriprise Financial vs. Samsung Electronics Co | Ameriprise Financial vs. Hyundai Motor | Ameriprise Financial vs. Toyota Motor Corp |
| Eastman Chemical vs. UNIQA Insurance Group | Eastman Chemical vs. Westlake Chemical Corp | Eastman Chemical vs. Greenroc Mining PLC | Eastman Chemical vs. McEwen Mining |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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