Correlation Between Ameriprise Financial and PT Bank
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and PT Bank 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 PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and PT Bank Maybank, you can compare the effects of market volatilities on Ameriprise Financial and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and PT Bank.
Diversification Opportunities for Ameriprise Financial and PT Bank
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ameriprise and BOZA is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and PT Bank Maybank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Maybank 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Maybank has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and PT Bank go up and down completely randomly.
Pair Corralation between Ameriprise Financial and PT Bank
Assuming the 90 days horizon Ameriprise Financial is expected to generate 0.83 times more return on investment than PT Bank. However, Ameriprise Financial is 1.21 times less risky than PT Bank. It trades about 0.25 of its potential returns per unit of risk. PT Bank Maybank is currently generating about 0.07 per unit of risk. If you would invest 46,540 in Ameriprise Financial on September 3, 2024 and sell it today you would earn a total of 7,660 from holding Ameriprise Financial or generate 16.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameriprise Financial vs. PT Bank Maybank
Performance |
| Timeline |
| Ameriprise Financial |
| PT Bank Maybank |
Ameriprise Financial and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and PT Bank
The main advantage of trading using opposite Ameriprise Financial and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| Ameriprise Financial vs. Spirent Communications plc | Ameriprise Financial vs. Penn National Gaming | Ameriprise Financial vs. Hemisphere Energy Corp | Ameriprise Financial vs. QINGCI GAMES INC |
| PT Bank vs. Iridium Communications | PT Bank vs. Gamma Communications plc | PT Bank vs. Ming Le Sports | PT Bank vs. Jacquet Metal Service |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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