Correlation Between First Majestic and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both First Majestic 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 First Majestic and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and Ameriprise Financial, you can compare the effects of market volatilities on First Majestic 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 First Majestic with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Ameriprise Financial.
Diversification Opportunities for First Majestic and Ameriprise Financial
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Ameriprise is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and First Majestic 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 First Majestic Silver 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 First Majestic i.e., First Majestic and Ameriprise Financial go up and down completely randomly.
Pair Corralation between First Majestic and Ameriprise Financial
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Ameriprise Financial. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 7.75 times less risky than Ameriprise Financial. The stock trades about -0.06 of its potential returns per unit of risk. The Ameriprise Financial is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 928,741 in Ameriprise Financial on August 28, 2024 and sell it today you would earn a total of 229,412 from holding Ameriprise Financial or generate 24.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
First Majestic Silver vs. Ameriprise Financial
Performance |
| Timeline |
| First Majestic Silver |
| Ameriprise Financial |
First Majestic and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Ameriprise Financial
The main advantage of trading using opposite First Majestic and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic 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.| First Majestic vs. Visa Inc | First Majestic vs. Desarrolladora Homex SAB | First Majestic vs. CMR SAB de | First Majestic vs. The Select Sector |
| Ameriprise Financial vs. Southwest Airlines | Ameriprise Financial vs. Deutsche Bank Aktiengesellschaft | Ameriprise Financial vs. Genworth Financial | Ameriprise Financial vs. New Oriental Education |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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