Correlation Between Datang International and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Datang International 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 Datang International and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datang International Power and Ameriprise Financial, you can compare the effects of market volatilities on Datang International 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 Datang International with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and Ameriprise Financial.
Diversification Opportunities for Datang International and Ameriprise Financial
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Datang and Ameriprise is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Datang International 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 Datang International Power 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 Datang International i.e., Datang International and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Datang International and Ameriprise Financial
Assuming the 90 days horizon Datang International Power is expected to under-perform the Ameriprise Financial. In addition to that, Datang International is 1.43 times more volatile than Ameriprise Financial. It trades about -0.02 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about 0.07 per unit of volatility. If you would invest 46,801 in Ameriprise Financial on October 15, 2024 and sell it today you would earn a total of 3,439 from holding Ameriprise Financial or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang International Power vs. Ameriprise Financial
Performance |
| Timeline |
| Datang International |
| Ameriprise Financial |
Datang International and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and Ameriprise Financial
The main advantage of trading using opposite Datang International and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International 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.| Datang International vs. Benchmark Electronics | Datang International vs. G III Apparel Group | Datang International vs. Methode Electronics | Datang International vs. IMPERIAL TOBACCO |
| Ameriprise Financial vs. KINGBOARD CHEMICAL | Ameriprise Financial vs. Tianjin Capital Environmental | Ameriprise Financial vs. COSMOSTEEL HLDGS | Ameriprise Financial vs. KOBE STEEL LTD |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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