Correlation Between Ameriprise Financial and Carlyle
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Carlyle 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 Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and Carlyle Group, you can compare the effects of market volatilities on Ameriprise Financial and Carlyle 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 Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Carlyle.
Diversification Opportunities for Ameriprise Financial and Carlyle
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ameriprise and Carlyle is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Carlyle go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Carlyle
Considering the 90-day investment horizon Ameriprise Financial is expected to generate 1.01 times less return on investment than Carlyle. But when comparing it to its historical volatility, Ameriprise Financial is 1.67 times less risky than Carlyle. It trades about 0.15 of its potential returns per unit of risk. Carlyle Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,409 in Carlyle Group on August 27, 2024 and sell it today you would earn a total of 1,956 from holding Carlyle Group or generate 57.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameriprise Financial vs. Carlyle Group
Performance |
| Timeline |
| Ameriprise Financial |
| Carlyle Group |
Ameriprise Financial and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriprise Financial and Carlyle
The main advantage of trading using opposite Ameriprise Financial and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Carlyle 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 Carlyle will offset losses from the drop in Carlyle's long position.| Ameriprise Financial vs. PowerUp Acquisition Corp | Ameriprise Financial vs. Aurora Innovation | Ameriprise Financial vs. HUMANA INC | Ameriprise Financial vs. Aquagold International |
| Carlyle vs. PowerUp Acquisition Corp | Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle vs. Aquagold International |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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