Correlation Between Geely Automobile and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Geely Automobile 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 Geely Automobile and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Ameriprise Financial, you can compare the effects of market volatilities on Geely Automobile 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 Geely Automobile with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Ameriprise Financial.
Diversification Opportunities for Geely Automobile and Ameriprise Financial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Geely and Ameriprise is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Geely Automobile 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 Geely Automobile Holdings 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 Geely Automobile i.e., Geely Automobile and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Geely Automobile and Ameriprise Financial
Assuming the 90 days horizon Geely Automobile is expected to generate 1.41 times less return on investment than Ameriprise Financial. In addition to that, Geely Automobile is 1.88 times more volatile than Ameriprise Financial. It trades about 0.1 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about 0.26 per unit of volatility. If you would invest 41,956 in Ameriprise Financial on August 30, 2024 and sell it today you would earn a total of 12,104 from holding Ameriprise Financial or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Ameriprise Financial
Performance |
| Timeline |
| Geely Automobile Holdings |
| Ameriprise Financial |
Geely Automobile and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Ameriprise Financial
The main advantage of trading using opposite Geely Automobile and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile 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.| Geely Automobile vs. SCANDMEDICAL SOLDK 040 | Geely Automobile vs. MeVis Medical Solutions | Geely Automobile vs. ONWARD MEDICAL BV | Geely Automobile vs. Diamyd Medical AB |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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