Correlation Between Ameriprise Financial and Progressive
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Progressive 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 Progressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and The Progressive, you can compare the effects of market volatilities on Ameriprise Financial and Progressive 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 Progressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Progressive.
Diversification Opportunities for Ameriprise Financial and Progressive
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ameriprise and Progressive is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and The Progressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive 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 Progressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Progressive go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Progressive
Assuming the 90 days horizon Ameriprise Financial is expected to generate 1.21 times less return on investment than Progressive. But when comparing it to its historical volatility, Ameriprise Financial is 1.03 times less risky than Progressive. It trades about 0.13 of its potential returns per unit of risk. The Progressive is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 13,982 in The Progressive on September 12, 2024 and sell it today you would earn a total of 9,353 from holding The Progressive or generate 66.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameriprise Financial vs. The Progressive
Performance |
| Timeline |
| Ameriprise Financial |
| Progressive |
Ameriprise Financial and Progressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and Progressive
The main advantage of trading using opposite Ameriprise Financial and Progressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Progressive 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 Progressive will offset losses from the drop in Progressive's long position.| Ameriprise Financial vs. Ares Management Corp | Ameriprise Financial vs. Superior Plus Corp | Ameriprise Financial vs. SIVERS SEMICONDUCTORS AB | Ameriprise Financial vs. CHINA HUARONG ENERHD 50 |
| Progressive vs. QBE Insurance Group | Progressive vs. Insurance Australia Group | Progressive vs. Superior Plus Corp | Progressive vs. SIVERS SEMICONDUCTORS AB |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |