Correlation Between Ameriprise Financial and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and SBM Offshore 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 SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and SBM Offshore NV, you can compare the effects of market volatilities on Ameriprise Financial and SBM Offshore 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 SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and SBM Offshore.
Diversification Opportunities for Ameriprise Financial and SBM Offshore
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ameriprise and SBM is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV 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 SBM Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM Offshore NV has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and SBM Offshore go up and down completely randomly.
Pair Corralation between Ameriprise Financial and SBM Offshore
Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 1.08 times more return on investment than SBM Offshore. However, Ameriprise Financial is 1.08 times more volatile than SBM Offshore NV. It trades about 0.24 of its potential returns per unit of risk. SBM Offshore NV is currently generating about 0.05 per unit of risk. If you would invest 51,288 in Ameriprise Financial on September 1, 2024 and sell it today you would earn a total of 6,109 from holding Ameriprise Financial or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ameriprise Financial vs. SBM Offshore NV
Performance |
| Timeline |
| Ameriprise Financial |
| SBM Offshore NV |
Ameriprise Financial and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and SBM Offshore
The main advantage of trading using opposite Ameriprise Financial and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, SBM Offshore 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 SBM Offshore will offset losses from the drop in SBM Offshore's long position.| Ameriprise Financial vs. Uniper SE | Ameriprise Financial vs. Mulberry Group PLC | Ameriprise Financial vs. London Security Plc | Ameriprise Financial vs. Triad Group PLC |
| SBM Offshore vs. Bankers Investment Trust | SBM Offshore vs. Elmos Semiconductor SE | SBM Offshore vs. Beeks Trading | SBM Offshore vs. Tatton Asset Management |
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 CEOs Directory module to screen CEOs from public companies around the world.
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