Correlation Between Ameriprise Financial and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Coca Cola 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 Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and Coca Cola Co, you can compare the effects of market volatilities on Ameriprise Financial and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Coca Cola.
Diversification Opportunities for Ameriprise Financial and Coca Cola
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ameriprise and Coca is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Coca Cola Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Coca Cola go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Coca Cola
Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 2.54 times more return on investment than Coca Cola. However, Ameriprise Financial is 2.54 times more volatile than Coca Cola Co. It trades about 0.21 of its potential returns per unit of risk. Coca Cola Co is currently generating about -0.18 per unit of risk. If you would invest 51,477 in Ameriprise Financial on August 30, 2024 and sell it today you would earn a total of 5,760 from holding Ameriprise Financial or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ameriprise Financial vs. Coca Cola Co
Performance |
| Timeline |
| Ameriprise Financial |
| Coca Cola |
Ameriprise Financial and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and Coca Cola
The main advantage of trading using opposite Ameriprise Financial and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Ameriprise Financial vs. Tungsten West PLC | Ameriprise Financial vs. Argo Group Limited | Ameriprise Financial vs. Hardide PLC | Ameriprise Financial vs. Versarien PLC |
| Coca Cola vs. Schroder Real Estate | Coca Cola vs. Herald Investment Trust | Coca Cola vs. British American Tobacco | Coca Cola vs. Dunedin Enterprise Investment |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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