Correlation Between Franklin Credit and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Franklin Credit 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 Franklin Credit and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Credit Management and Ameriprise Financial, you can compare the effects of market volatilities on Franklin Credit 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 Franklin Credit with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and Ameriprise Financial.
Diversification Opportunities for Franklin Credit and Ameriprise Financial
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Ameriprise is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Franklin Credit 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 Franklin Credit Management 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 Franklin Credit i.e., Franklin Credit and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Franklin Credit and Ameriprise Financial
Given the investment horizon of 90 days Franklin Credit Management is expected to generate 8.58 times more return on investment than Ameriprise Financial. However, Franklin Credit is 8.58 times more volatile than Ameriprise Financial. It trades about 0.04 of its potential returns per unit of risk. Ameriprise Financial is currently generating about 0.07 per unit of risk. If you would invest 25.00 in Franklin Credit Management on November 19, 2024 and sell it today you would lose (15.00) from holding Franklin Credit Management or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Franklin Credit Management vs. Ameriprise Financial
Performance |
| Timeline |
| Franklin Credit Mana |
| Ameriprise Financial |
Franklin Credit and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Credit and Ameriprise Financial
The main advantage of trading using opposite Franklin Credit and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit 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.| Franklin Credit vs. Global Healthcare REIT | Franklin Credit vs. Freedom Bank of | Franklin Credit vs. Hinto Energy | Franklin Credit vs. Ensurge |
| Ameriprise Financial vs. State Street Corp | Ameriprise Financial vs. Bank of New | Ameriprise Financial vs. SEI Investments | Ameriprise Financial vs. Principal Financial Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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