Correlation Between SAMS INTERNAT and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both SAMS INTERNAT and Ameriprise Financial 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 SAMS INTERNAT and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAMS INTERNAT R and Ameriprise Financial, you can compare the effects of market volatilities on SAMS INTERNAT and Ameriprise Financial 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 SAMS INTERNAT with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAMS INTERNAT and Ameriprise Financial.
Diversification Opportunities for SAMS INTERNAT and Ameriprise Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SAMS and Ameriprise is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SAMS INTERNAT R and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and SAMS INTERNAT 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 SAMS INTERNAT R are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of SAMS INTERNAT i.e., SAMS INTERNAT and Ameriprise Financial go up and down completely randomly.
Pair Corralation between SAMS INTERNAT and Ameriprise Financial
Assuming the 90 days trading horizon SAMS INTERNAT is expected to generate 1.21 times less return on investment than Ameriprise Financial. In addition to that, SAMS INTERNAT is 2.6 times more volatile than Ameriprise Financial. It trades about 0.05 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about 0.14 per unit of volatility. If you would invest 33,333 in Ameriprise Financial on September 4, 2024 and sell it today you would earn a total of 20,367 from holding Ameriprise Financial or generate 61.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAMS INTERNAT R vs. Ameriprise Financial
Performance |
| Timeline |
| SAMS INTERNAT R |
| Ameriprise Financial |
SAMS INTERNAT and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAMS INTERNAT and Ameriprise Financial
The main advantage of trading using opposite SAMS INTERNAT and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAMS INTERNAT position performs unexpectedly, Ameriprise Financial 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.| SAMS INTERNAT vs. NORTHEAST UTILITIES | SAMS INTERNAT vs. Daito Trust Construction | SAMS INTERNAT vs. Australian Agricultural | SAMS INTERNAT vs. Nufarm Limited |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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