Correlation Between National Health and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both National Health 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 National Health and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Health Investors and Ameriprise Financial, you can compare the effects of market volatilities on National Health 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 National Health with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Ameriprise Financial.
Diversification Opportunities for National Health and Ameriprise Financial
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Ameriprise is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and National Health 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 National Health Investors 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 National Health i.e., National Health and Ameriprise Financial go up and down completely randomly.
Pair Corralation between National Health and Ameriprise Financial
Assuming the 90 days trading horizon National Health Investors is expected to under-perform the Ameriprise Financial. In addition to that, National Health is 1.19 times more volatile than Ameriprise Financial. It trades about -0.13 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about -0.04 per unit of volatility. If you would invest 53,340 in Ameriprise Financial on October 19, 2024 and sell it today you would lose (1,180) from holding Ameriprise Financial or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Health Investors vs. Ameriprise Financial
Performance |
| Timeline |
| National Health Investors |
| Ameriprise Financial |
National Health and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Ameriprise Financial
The main advantage of trading using opposite National Health and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health 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.| National Health vs. Liberty Broadband | National Health vs. GOLD ROAD RES | National Health vs. EVS Broadcast Equipment | National Health vs. Samsung Electronics Co |
| Ameriprise Financial vs. SEI INVESTMENTS | Ameriprise Financial vs. National Health Investors | Ameriprise Financial vs. AGNC INVESTMENT | Ameriprise Financial vs. SLR Investment Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |