Correlation Between Light Science and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Light Science 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 Light Science and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Light Science Technologies and Ameriprise Financial, you can compare the effects of market volatilities on Light Science 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 Light Science with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Light Science and Ameriprise Financial.
Diversification Opportunities for Light Science and Ameriprise Financial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Light and Ameriprise is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Light Science Technologies and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Light Science 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 Light Science Technologies 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 Light Science i.e., Light Science and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Light Science and Ameriprise Financial
Assuming the 90 days trading horizon Light Science is expected to generate 1.03 times less return on investment than Ameriprise Financial. In addition to that, Light Science is 4.25 times more volatile than Ameriprise Financial. It trades about 0.02 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about 0.07 per unit of volatility. If you would invest 32,841 in Ameriprise Financial on October 14, 2024 and sell it today you would earn a total of 19,004 from holding Ameriprise Financial or generate 57.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.79% |
Values | Daily Returns |
Light Science Technologies vs. Ameriprise Financial
Performance |
Timeline |
Light Science Techno |
Ameriprise Financial |
Light Science and Ameriprise Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Light Science and Ameriprise Financial
The main advantage of trading using opposite Light Science and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Light Science 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.Light Science vs. SupplyMe Capital PLC | Light Science vs. SM Energy Co | Light Science vs. FuelCell Energy | Light Science vs. Grand Vision Media |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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