Correlation Between Ameriprise Financial and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Alibaba Group 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 Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and Alibaba Group Holding, you can compare the effects of market volatilities on Ameriprise Financial and Alibaba Group 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 Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Alibaba Group.
Diversification Opportunities for Ameriprise Financial and Alibaba Group
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ameriprise and Alibaba is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding 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 Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Alibaba Group go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Alibaba Group
Assuming the 90 days trading horizon Ameriprise Financial is expected to under-perform the Alibaba Group. But the stock apears to be less risky and, when comparing its historical volatility, Ameriprise Financial is 4.04 times less risky than Alibaba Group. The stock trades about -0.04 of its potential returns per unit of risk. The Alibaba Group Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 172,184 in Alibaba Group Holding on October 24, 2024 and sell it today you would earn a total of 4,466 from holding Alibaba Group Holding or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameriprise Financial vs. Alibaba Group Holding
Performance |
| Timeline |
| Ameriprise Financial |
| Alibaba Group Holding |
Ameriprise Financial and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and Alibaba Group
The main advantage of trading using opposite Ameriprise Financial and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Alibaba Group 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 Alibaba Group will offset losses from the drop in Alibaba Group's long position.| Ameriprise Financial vs. First Majestic Silver | Ameriprise Financial vs. Costco Wholesale | Ameriprise Financial vs. FIBRA Storage | Ameriprise Financial vs. Grupo Sports World |
| Alibaba Group vs. FibraHotel | Alibaba Group vs. Grupo Industrial Saltillo | Alibaba Group vs. GMxico Transportes SAB | Alibaba Group vs. Cognizant Technology Solutions |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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