Correlation Between LIFENET INSURANCE and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE 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 LIFENET INSURANCE and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Ameriprise Financial, you can compare the effects of market volatilities on LIFENET INSURANCE 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 LIFENET INSURANCE with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Ameriprise Financial.
Diversification Opportunities for LIFENET INSURANCE and Ameriprise Financial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LIFENET and Ameriprise is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and LIFENET INSURANCE 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 LIFENET INSURANCE CO 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 LIFENET INSURANCE i.e., LIFENET INSURANCE and Ameriprise Financial go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Ameriprise Financial
Assuming the 90 days horizon LIFENET INSURANCE is expected to generate 3.38 times less return on investment than Ameriprise Financial. But when comparing it to its historical volatility, LIFENET INSURANCE CO is 1.36 times less risky than Ameriprise Financial. It trades about 0.1 of its potential returns per unit of risk. Ameriprise Financial is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 46,572 in Ameriprise Financial on September 1, 2024 and sell it today you would earn a total of 7,448 from holding Ameriprise Financial or generate 15.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Ameriprise Financial
Performance |
| Timeline |
| LIFENET INSURANCE |
| Ameriprise Financial |
LIFENET INSURANCE and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Ameriprise Financial
The main advantage of trading using opposite LIFENET INSURANCE and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE 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.| LIFENET INSURANCE vs. Fukuyama Transporting Co | LIFENET INSURANCE vs. Sporttotal AG | LIFENET INSURANCE vs. COLUMBIA SPORTSWEAR | LIFENET INSURANCE vs. ADRIATIC METALS LS 013355 |
| Ameriprise Financial vs. USWE SPORTS AB | Ameriprise Financial vs. PKSHA TECHNOLOGY INC | Ameriprise Financial vs. SPORT LISBOA E | Ameriprise Financial vs. Amkor Technology |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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