Correlation Between Ameriprise Financial and American Express
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and American Express 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 American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and American Express, you can compare the effects of market volatilities on Ameriprise Financial and American Express 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 American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and American Express.
Diversification Opportunities for Ameriprise Financial and American Express
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ameriprise and American is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express 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 American Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Express has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and American Express go up and down completely randomly.
Pair Corralation between Ameriprise Financial and American Express
Assuming the 90 days horizon Ameriprise Financial is expected to generate 1.31 times less return on investment than American Express. But when comparing it to its historical volatility, Ameriprise Financial is 1.1 times less risky than American Express. It trades about 0.1 of its potential returns per unit of risk. American Express is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 20,723 in American Express on October 25, 2024 and sell it today you would earn a total of 10,207 from holding American Express or generate 49.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameriprise Financial vs. American Express
Performance |
| Timeline |
| Ameriprise Financial |
| American Express |
Ameriprise Financial and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and American Express
The main advantage of trading using opposite Ameriprise Financial and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, American Express 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 American Express will offset losses from the drop in American Express' long position.| Ameriprise Financial vs. Blackstone Group | Ameriprise Financial vs. The Bank of | Ameriprise Financial vs. State Street | Ameriprise Financial vs. EQT AB |
| American Express vs. MAGNUM MINING EXP | American Express vs. MCEWEN MINING INC | American Express vs. MINCO SILVER | American Express vs. Harmony Gold Mining |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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