Correlation Between Logan Ridge and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Logan Ridge 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 Logan Ridge and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Logan Ridge Finance and Ameriprise Financial, you can compare the effects of market volatilities on Logan Ridge 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 Logan Ridge with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and Ameriprise Financial.
Diversification Opportunities for Logan Ridge and Ameriprise Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Logan and Ameriprise is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Logan Ridge 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 Logan Ridge Finance 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 Logan Ridge i.e., Logan Ridge and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Logan Ridge and Ameriprise Financial
Given the investment horizon of 90 days Logan Ridge is expected to generate 1.93 times less return on investment than Ameriprise Financial. But when comparing it to its historical volatility, Logan Ridge Finance is 1.1 times less risky than Ameriprise Financial. It trades about 0.1 of its potential returns per unit of risk. Ameriprise Financial is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 32,866 in Ameriprise Financial on September 1, 2024 and sell it today you would earn a total of 24,531 from holding Ameriprise Financial or generate 74.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Logan Ridge Finance vs. Ameriprise Financial
Performance |
| Timeline |
| Logan Ridge Finance |
| Ameriprise Financial |
Logan Ridge and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logan Ridge and Ameriprise Financial
The main advantage of trading using opposite Logan Ridge and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logan Ridge 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.| Logan Ridge vs. Badger Infrastructure Solutions | Logan Ridge vs. Portman Ridge Finance | Logan Ridge vs. Inotiv Inc | Logan Ridge vs. Phenixfin |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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