Correlation Between Companhia Siderrgica and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Companhia Siderrgica 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 Companhia Siderrgica and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Siderrgica Nacional and Ameriprise Financial, you can compare the effects of market volatilities on Companhia Siderrgica 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 Companhia Siderrgica with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderrgica and Ameriprise Financial.
Diversification Opportunities for Companhia Siderrgica and Ameriprise Financial
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Ameriprise is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderrgica Nacional and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Companhia Siderrgica 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 Companhia Siderrgica Nacional 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 Companhia Siderrgica i.e., Companhia Siderrgica and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Companhia Siderrgica and Ameriprise Financial
Assuming the 90 days trading horizon Companhia Siderrgica Nacional is expected to under-perform the Ameriprise Financial. But the stock apears to be less risky and, when comparing its historical volatility, Companhia Siderrgica Nacional is 1.77 times less risky than Ameriprise Financial. The stock trades about -0.14 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 928,889 in Ameriprise Financial on September 13, 2024 and sell it today you would earn a total of 171,588 from holding Ameriprise Financial or generate 18.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Siderrgica Nacional vs. Ameriprise Financial
Performance |
| Timeline |
| Companhia Siderrgica |
| Ameriprise Financial |
Companhia Siderrgica and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Siderrgica and Ameriprise Financial
The main advantage of trading using opposite Companhia Siderrgica and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Siderrgica 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.| Companhia Siderrgica vs. Ameriprise Financial | Companhia Siderrgica vs. Grupo Carso SAB | Companhia Siderrgica vs. Martin Marietta Materials | Companhia Siderrgica vs. New Oriental Education |
| Ameriprise Financial vs. Samsung Electronics Co | Ameriprise Financial vs. Grupo Hotelero Santa | Ameriprise Financial vs. Verizon Communications | Ameriprise Financial vs. First Majestic Silver |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |