Correlation Between General Dynamics and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both General Dynamics 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 General Dynamics and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Dynamics and Ameriprise Financial, you can compare the effects of market volatilities on General Dynamics 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 General Dynamics with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Dynamics and Ameriprise Financial.
Diversification Opportunities for General Dynamics and Ameriprise Financial
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between General and Ameriprise is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and General Dynamics 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 General Dynamics 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 General Dynamics i.e., General Dynamics and Ameriprise Financial go up and down completely randomly.
Pair Corralation between General Dynamics and Ameriprise Financial
Assuming the 90 days horizon General Dynamics is expected to generate 1.44 times more return on investment than Ameriprise Financial. However, General Dynamics is 1.44 times more volatile than Ameriprise Financial. It trades about 0.23 of its potential returns per unit of risk. Ameriprise Financial is currently generating about -0.04 per unit of risk. If you would invest 530,462 in General Dynamics on October 21, 2024 and sell it today you would earn a total of 11,296 from holding General Dynamics or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Dynamics vs. Ameriprise Financial
Performance |
| Timeline |
| General Dynamics |
| Ameriprise Financial |
General Dynamics and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Dynamics and Ameriprise Financial
The main advantage of trading using opposite General Dynamics and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Dynamics 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.| General Dynamics vs. The Boeing | General Dynamics vs. Lockheed Martin | General Dynamics vs. Textron | General Dynamics vs. Amazon Inc |
| Ameriprise Financial vs. Grupo Carso SAB | Ameriprise Financial vs. United States Steel | Ameriprise Financial vs. Genworth Financial | Ameriprise Financial vs. Micron Technology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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