Correlation Between Federated Investors and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Federated Investors 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 Federated Investors and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Investors B and Ameriprise Financial, you can compare the effects of market volatilities on Federated Investors 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 Federated Investors with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Investors and Ameriprise Financial.
Diversification Opportunities for Federated Investors and Ameriprise Financial
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Ameriprise is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Federated Investors B and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Federated Investors 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 Federated Investors B 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 Federated Investors i.e., Federated Investors and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Federated Investors and Ameriprise Financial
Considering the 90-day investment horizon Federated Investors is expected to generate 1.41 times less return on investment than Ameriprise Financial. But when comparing it to its historical volatility, Federated Investors B is 1.07 times less risky than Ameriprise Financial. It trades about 0.12 of its potential returns per unit of risk. Ameriprise Financial is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 34,796 in Ameriprise Financial on September 2, 2024 and sell it today you would earn a total of 22,601 from holding Ameriprise Financial or generate 64.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Investors B vs. Ameriprise Financial
Performance |
| Timeline |
| Federated Investors |
| Ameriprise Financial |
Federated Investors and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Investors and Ameriprise Financial
The main advantage of trading using opposite Federated Investors and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Investors 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.| Federated Investors vs. Federated Premier Municipal | Federated Investors vs. Blackrock Muniyield | Federated Investors vs. Diamond Hill Investment | Federated Investors vs. NXG NextGen Infrastructure |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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