Correlation Between Investor and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Investor 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 Investor and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investor AB ser and Ameriprise Financial, you can compare the effects of market volatilities on Investor 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 Investor with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Ameriprise Financial.
Diversification Opportunities for Investor and Ameriprise Financial
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Investor and Ameriprise is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB ser and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Investor 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 Investor AB ser 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 Investor i.e., Investor and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Investor and Ameriprise Financial
Assuming the 90 days horizon Investor AB ser is expected to under-perform the Ameriprise Financial. But the pink sheet apears to be less risky and, when comparing its historical volatility, Investor AB ser is 1.56 times less risky than Ameriprise Financial. The pink sheet trades about -0.23 of its potential returns per unit of risk. The Ameriprise Financial is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 51,895 in Ameriprise Financial on August 24, 2024 and sell it today you would earn a total of 5,126 from holding Ameriprise Financial or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investor AB ser vs. Ameriprise Financial
Performance |
| Timeline |
| Investor AB ser |
| Ameriprise Financial |
Investor and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investor and Ameriprise Financial
The main advantage of trading using opposite Investor and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor 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.| Investor vs. Guggenheim Strategic Opportunities | Investor vs. Pimco Dynamic Income | Investor vs. Rivernorth Opportunities | Investor vs. Cornerstone Strategic Value |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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