Correlation Between Coty and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Coty 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 Coty and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coty Inc and Ameriprise Financial, you can compare the effects of market volatilities on Coty 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 Coty with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coty and Ameriprise Financial.
Diversification Opportunities for Coty and Ameriprise Financial
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coty and Ameriprise is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Coty 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 Coty Inc 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 Coty i.e., Coty and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Coty and Ameriprise Financial
Given the investment horizon of 90 days Coty Inc is expected to under-perform the Ameriprise Financial. But the stock apears to be less risky and, when comparing its historical volatility, Coty Inc is 1.3 times less risky than Ameriprise Financial. The stock trades about -0.07 of its potential returns per unit of risk. The Ameriprise Financial is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 50,274 in Ameriprise Financial on August 25, 2024 and sell it today you would earn a total of 6,933 from holding Ameriprise Financial or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coty Inc vs. Ameriprise Financial
Performance |
| Timeline |
| Coty Inc |
| Ameriprise Financial |
Coty and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coty and Ameriprise Financial
The main advantage of trading using opposite Coty and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coty 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.The idea behind Coty Inc and Ameriprise Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ameriprise Financial vs. PowerUp Acquisition Corp | Ameriprise Financial vs. Aurora Innovation | Ameriprise Financial vs. HUMANA INC | Ameriprise Financial 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |