Correlation Between Ameriprise Financial and Mercantile Investment
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Mercantile Investment 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 Mercantile Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and The Mercantile Investment, you can compare the effects of market volatilities on Ameriprise Financial and Mercantile Investment 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 Mercantile Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Mercantile Investment.
Diversification Opportunities for Ameriprise Financial and Mercantile Investment
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ameriprise and Mercantile is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and The Mercantile Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Mercantile Investment 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 Mercantile Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Mercantile Investment has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Mercantile Investment go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Mercantile Investment
Assuming the 90 days trading horizon Ameriprise Financial is expected to under-perform the Mercantile Investment. In addition to that, Ameriprise Financial is 1.33 times more volatile than The Mercantile Investment. It trades about -0.29 of its total potential returns per unit of risk. The Mercantile Investment is currently generating about -0.17 per unit of volatility. If you would invest 23,698 in The Mercantile Investment on September 24, 2024 and sell it today you would lose (698.00) from holding The Mercantile Investment or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ameriprise Financial vs. The Mercantile Investment
Performance |
| Timeline |
| Ameriprise Financial |
| The Mercantile Investment |
Ameriprise Financial and Mercantile Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and Mercantile Investment
The main advantage of trading using opposite Ameriprise Financial and Mercantile Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Mercantile Investment 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 Mercantile Investment will offset losses from the drop in Mercantile Investment's long position.| Ameriprise Financial vs. Lords Grp Trading | Ameriprise Financial vs. New Residential Investment | Ameriprise Financial vs. Tatton Asset Management | Ameriprise Financial vs. Livermore Investments Group |
| Mercantile Investment vs. Ameriprise Financial | Mercantile Investment vs. Regions Financial Corp | Mercantile Investment vs. Gruppo MutuiOnline SpA | Mercantile Investment vs. Diversified Energy |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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