Correlation Between Sparta AG and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Sparta AG 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 Sparta AG and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparta AG and Ameriprise Financial, you can compare the effects of market volatilities on Sparta AG 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 Sparta AG with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta AG and Ameriprise Financial.
Diversification Opportunities for Sparta AG and Ameriprise Financial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sparta and Ameriprise is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sparta AG and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Sparta AG 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 Sparta AG 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 Sparta AG i.e., Sparta AG and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Sparta AG and Ameriprise Financial
Assuming the 90 days trading horizon Sparta AG is expected to generate 2473.33 times less return on investment than Ameriprise Financial. But when comparing it to its historical volatility, Sparta AG is 11.15 times less risky than Ameriprise Financial. It trades about 0.0 of its potential returns per unit of risk. Ameriprise Financial is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 46,472 in Ameriprise Financial on September 2, 2024 and sell it today you would earn a total of 7,728 from holding Ameriprise Financial or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparta AG vs. Ameriprise Financial
Performance |
| Timeline |
| Sparta AG |
| Ameriprise Financial |
Sparta AG and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparta AG and Ameriprise Financial
The main advantage of trading using opposite Sparta AG and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta AG 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.| Sparta AG vs. Ameriprise Financial | Sparta AG vs. Ares Management Corp | Sparta AG vs. Superior Plus Corp | Sparta AG vs. NMI Holdings |
| Ameriprise Financial vs. United Insurance Holdings | Ameriprise Financial vs. National Beverage Corp | Ameriprise Financial vs. Japan Post Insurance | Ameriprise Financial vs. HANOVER INSURANCE |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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