Correlation Between Ameriprise Financial and FedEx
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and FedEx 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 FedEx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and FedEx, you can compare the effects of market volatilities on Ameriprise Financial and FedEx 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 FedEx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and FedEx.
Diversification Opportunities for Ameriprise Financial and FedEx
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ameriprise and FedEx is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx 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 FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and FedEx go up and down completely randomly.
Pair Corralation between Ameriprise Financial and FedEx
Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 1.13 times more return on investment than FedEx. However, Ameriprise Financial is 1.13 times more volatile than FedEx. It trades about 0.14 of its potential returns per unit of risk. FedEx is currently generating about 0.12 per unit of risk. If you would invest 731,943 in Ameriprise Financial on September 1, 2024 and sell it today you would earn a total of 426,210 from holding Ameriprise Financial or generate 58.23% 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. FedEx
Performance |
| Timeline |
| Ameriprise Financial |
| FedEx |
Ameriprise Financial and FedEx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and FedEx
The main advantage of trading using opposite Ameriprise Financial and FedEx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, FedEx 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 FedEx will offset losses from the drop in FedEx's long position.| Ameriprise Financial vs. Banco del Bajo | Ameriprise Financial vs. Gentera SAB de | Ameriprise Financial vs. Megacable Holdings S | Ameriprise Financial vs. Becle SAB de |
| FedEx vs. Genworth Financial | FedEx vs. Grupo Sports World | FedEx vs. Capital One Financial | FedEx vs. Monster Beverage Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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