Correlation Between Ameriprise Financial and Epwin Group

Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Epwin Group 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 Ameriprise Financial and Epwin Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ameriprise Financial and Epwin Group PLC, you can compare the effects of market volatilities on Ameriprise Financial and Epwin Group 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 Ameriprise Financial with a short position of Epwin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Epwin Group.

Diversification Opportunities for Ameriprise Financial and Epwin Group

0.82

Correlation Coefficient

Ameriprise Financial  Epwin Group

Very poor diversification

The 3 months correlation between Ameriprise and Epwin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Epwin Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epwin Group PLC and Ameriprise Financial 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 Ameriprise Financial are associated (or correlated) with Epwin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epwin Group PLC has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Epwin Group go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Epwin Group

Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 1.09 times less return on investment than Epwin Group. But when comparing it to its historical volatility, Ameriprise Financial is 1.11 times less risky than Epwin Group. It trades about 0.1 of its potential returns per unit of risk. Epwin Group PLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  6,228  in Epwin Group PLC on September 12, 2024 and sell it today you would earn a total of  4,172  from holding Epwin Group PLC or generate 66.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.51%
Values	Daily Returns

Ameriprise Financial  vs.  Epwin Group PLC

Ameriprise Financial

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ameriprise Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Epwin Group PLC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Epwin Group PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Epwin Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ameriprise Financial and Epwin Group

The main advantage of trading using opposite Ameriprise Financial and Epwin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Epwin Group 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 Epwin Group will offset losses from the drop in Epwin Group's long position.

The idea behind Ameriprise Financial and Epwin Group PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.