Correlation Between Old Republic and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Old Republic 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 Old Republic and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and Ameriprise Financial, you can compare the effects of market volatilities on Old Republic 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 Old Republic with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and Ameriprise Financial.
Diversification Opportunities for Old Republic and Ameriprise Financial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Old and Ameriprise is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Old Republic 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 Old Republic International 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 Old Republic i.e., Old Republic and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Old Republic and Ameriprise Financial
Considering the 90-day investment horizon Old Republic International is expected to generate 1.3 times more return on investment than Ameriprise Financial. However, Old Republic is 1.3 times more volatile than Ameriprise Financial. It trades about -0.19 of its potential returns per unit of risk. Ameriprise Financial is currently generating about -0.27 per unit of risk. If you would invest 3,880 in Old Republic International on September 27, 2024 and sell it today you would lose (225.00) from holding Old Republic International or give up 5.8% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Old Republic International vs. Ameriprise Financial
Performance |
Timeline |
Old Republic Interna |
Ameriprise Financial |
Old Republic and Ameriprise Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Old Republic and Ameriprise Financial
The main advantage of trading using opposite Old Republic and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic 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.Old Republic vs. Axa Equitable Holdings | ||
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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