Correlation Between Microsoft and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Microsoft 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 Microsoft and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Ameriprise Financial, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Ameriprise Financial.
Diversification Opportunities for Microsoft and Ameriprise Financial
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Ameriprise is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Microsoft and Ameriprise Financial
Given the investment horizon of 90 days Microsoft is expected to generate 0.94 times more return on investment than Ameriprise Financial. However, Microsoft is 1.06 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 0.09 per unit of risk. If you would invest 22,130 in Microsoft on August 28, 2024 and sell it today you would earn a total of 19,749 from holding Microsoft or generate 89.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.35% |
| Values | Daily Returns |
Microsoft vs. Ameriprise Financial
Performance |
| Timeline |
| Microsoft |
| Ameriprise Financial |
Microsoft and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Ameriprise Financial
The main advantage of trading using opposite Microsoft and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Ameriprise Financial vs. The Bank of | Ameriprise Financial vs. Superior Plus Corp | Ameriprise Financial vs. NMI Holdings | Ameriprise Financial vs. Origin Agritech |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |