Correlation Between Ameriprise Financial and Credit Acceptance
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Credit Acceptance 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 Credit Acceptance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and Credit Acceptance, you can compare the effects of market volatilities on Ameriprise Financial and Credit Acceptance 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 Credit Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Credit Acceptance.
Diversification Opportunities for Ameriprise Financial and Credit Acceptance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ameriprise and Credit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Credit Acceptance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Acceptance 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 Credit Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Acceptance has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Credit Acceptance go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Credit Acceptance
Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 0.81 times more return on investment than Credit Acceptance. However, Ameriprise Financial is 1.24 times less risky than Credit Acceptance. It trades about 0.1 of its potential returns per unit of risk. Credit Acceptance is currently generating about 0.03 per unit of risk. If you would invest 41,486 in Ameriprise Financial on August 30, 2024 and sell it today you would earn a total of 42,812 from holding Ameriprise Financial or generate 103.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.36% |
| Values | Daily Returns |
Ameriprise Financial vs. Credit Acceptance
Performance |
| Timeline |
| Ameriprise Financial |
| Credit Acceptance |
Ameriprise Financial and Credit Acceptance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and Credit Acceptance
The main advantage of trading using opposite Ameriprise Financial and Credit Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Credit Acceptance 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 Credit Acceptance will offset losses from the drop in Credit Acceptance's long position.| Ameriprise Financial vs. Bradespar SA | Ameriprise Financial vs. Bradespar SA | Ameriprise Financial vs. Habitat Ii |
| Credit Acceptance vs. Extra Space Storage | Credit Acceptance vs. Warner Music Group | Credit Acceptance vs. GP Investments | Credit Acceptance vs. G2D Investments |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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