Correlation Between Ameriprise Financial and Halfords Group
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Halfords Group 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 Halfords Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and Halfords Group PLC, you can compare the effects of market volatilities on Ameriprise Financial and Halfords Group 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 Halfords Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Halfords Group.
Diversification Opportunities for Ameriprise Financial and Halfords Group
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ameriprise and Halfords is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Halfords Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halfords Group PLC 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 Halfords Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halfords Group PLC has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Halfords Group go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Halfords Group
Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 0.87 times more return on investment than Halfords Group. However, Ameriprise Financial is 1.15 times less risky than Halfords Group. It trades about 0.17 of its potential returns per unit of risk. Halfords Group PLC is currently generating about -0.16 per unit of risk. If you would invest 53,660 in Ameriprise Financial on October 25, 2024 and sell it today you would earn a total of 2,138 from holding Ameriprise Financial or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Ameriprise Financial vs. Halfords Group PLC
Performance |
| Timeline |
| Ameriprise Financial |
| Halfords Group PLC |
Ameriprise Financial and Halfords Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and Halfords Group
The main advantage of trading using opposite Ameriprise Financial and Halfords Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Halfords Group 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 Halfords Group will offset losses from the drop in Halfords Group's long position.| Ameriprise Financial vs. Toyota Motor Corp | Ameriprise Financial vs. SoftBank Group Corp | Ameriprise Financial vs. OTP Bank Nyrt | Ameriprise Financial vs. ONEOK Inc |
| Halfords Group vs. Grieg Seafood | Halfords Group vs. AfriTin Mining | Halfords Group vs. Endeavour Mining Corp | Halfords Group vs. Thor Mining PLC |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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