Correlation Between Ameriprise Financial and Air Lease
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Air Lease 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 Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and Air Lease, you can compare the effects of market volatilities on Ameriprise Financial and Air Lease 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 Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Air Lease.
Diversification Opportunities for Ameriprise Financial and Air Lease
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ameriprise and Air is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Air Lease go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Air Lease
Considering the 90-day investment horizon Ameriprise Financial is expected to generate 0.69 times more return on investment than Air Lease. However, Ameriprise Financial is 1.46 times less risky than Air Lease. It trades about 0.16 of its potential returns per unit of risk. Air Lease is currently generating about 0.08 per unit of risk. If you would invest 32,735 in Ameriprise Financial on September 4, 2024 and sell it today you would earn a total of 23,802 from holding Ameriprise Financial or generate 72.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameriprise Financial vs. Air Lease
Performance |
| Timeline |
| Ameriprise Financial |
| Air Lease |
Ameriprise Financial and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and Air Lease
The main advantage of trading using opposite Ameriprise Financial and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| Ameriprise Financial vs. Visa Class A | Ameriprise Financial vs. Diamond Hill Investment | Ameriprise Financial vs. Distoken Acquisition | Ameriprise Financial vs. Associated Capital Group |
| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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