Correlation Between Air Transport and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Transport 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 Transport Services and Ameriprise Financial, you can compare the effects of market volatilities on Air Transport 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 Transport with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Ameriprise Financial.
Diversification Opportunities for Air Transport and Ameriprise Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Air and Ameriprise is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Air Transport 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 Transport Services 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 Transport i.e., Air Transport and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Air Transport and Ameriprise Financial
Assuming the 90 days horizon Air Transport Services is expected to generate 0.6 times more return on investment than Ameriprise Financial. However, Air Transport Services is 1.68 times less risky than Ameriprise Financial. It trades about 0.1 of its potential returns per unit of risk. Ameriprise Financial is currently generating about -0.38 per unit of risk. If you would invest 2,080 in Air Transport Services on September 27, 2024 and sell it today you would earn a total of 20.00 from holding Air Transport Services or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Ameriprise Financial
Performance |
| Timeline |
| Air Transport Services |
| Ameriprise Financial |
Air Transport and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Ameriprise Financial
The main advantage of trading using opposite Air Transport and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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 Transport vs. Harmony Gold Mining | Air Transport vs. MCEWEN MINING INC | Air Transport vs. North American Construction | Air Transport vs. CarsalesCom |
| Ameriprise Financial vs. Public Storage | Ameriprise Financial vs. BII Railway Transportation | Ameriprise Financial vs. Air Transport Services | Ameriprise Financial vs. Datang International Power |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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