Correlation Between Air Lease and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Ameriprise Financial, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Ameriprise Financial.
Diversification Opportunities for Air Lease and Ameriprise Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Ameriprise is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Air Lease and Ameriprise Financial
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.48 times less return on investment than Ameriprise Financial. In addition to that, Air Lease is 1.41 times more volatile than Ameriprise Financial. It trades about 0.07 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about 0.15 per unit of volatility. If you would invest 32,314 in Ameriprise Financial on September 4, 2024 and sell it today you would earn a total of 24,223 from holding Ameriprise Financial or generate 74.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Ameriprise Financial
Performance |
| Timeline |
| Air Lease |
| Ameriprise Financial |
Air Lease and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Ameriprise Financial
The main advantage of trading using opposite Air Lease and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
| Ameriprise Financial vs. Visa Class A | Ameriprise Financial vs. Diamond Hill Investment | Ameriprise Financial vs. Distoken Acquisition | Ameriprise Financial vs. Associated Capital Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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