Correlation Between Western Union and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Western Union 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 Western Union and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Ameriprise Financial, you can compare the effects of market volatilities on Western Union 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 Western Union with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Ameriprise Financial.
Diversification Opportunities for Western Union and Ameriprise Financial
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Ameriprise is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Western Union 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 Western Union Co 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 Western Union i.e., Western Union and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Western Union and Ameriprise Financial
Allowing for the 90-day total investment horizon Western Union Co is expected to generate 1.42 times more return on investment than Ameriprise Financial. However, Western Union is 1.42 times more volatile than Ameriprise Financial. It trades about 0.14 of its potential returns per unit of risk. Ameriprise Financial is currently generating about -0.2 per unit of risk. If you would invest 1,062 in Western Union Co on September 12, 2024 and sell it today you would earn a total of 35.00 from holding Western Union Co or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Union Co vs. Ameriprise Financial
Performance |
| Timeline |
| Western Union |
| Ameriprise Financial |
Western Union and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Ameriprise Financial
The main advantage of trading using opposite Western Union and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union 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.| Western Union vs. American Express | Western Union vs. Capital One Financial | Western Union vs. Upstart Holdings | Western Union vs. Ally Financial |
| Ameriprise Financial vs. Gladstone Investment | Ameriprise Financial vs. Stellus Capital Investment | Ameriprise Financial vs. Prospect Capital | Ameriprise Financial vs. Gladstone Capital |
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.
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