Correlation Between Ameriprise Financial and Kilroy Realty

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

By analyzing existing cross correlation between Ameriprise Financial and Kilroy Realty Corp, you can compare the effects of market volatilities on Ameriprise Financial and Kilroy Realty 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 Kilroy Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Kilroy Realty.

Diversification Opportunities for Ameriprise Financial and Kilroy Realty

0.75

Correlation Coefficient

Ameriprise Financial  Kilroy Realty

Poor diversification

The 3 months correlation between Ameriprise and Kilroy is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Kilroy Realty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilroy Realty Corp 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 Kilroy Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilroy Realty Corp has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Kilroy Realty go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Kilroy Realty

Assuming the 90 days horizon Ameriprise Financial is expected to under-perform the Kilroy Realty. But the stock apears to be less risky and, when comparing its historical volatility, Ameriprise Financial is 2.71 times less risky than Kilroy Realty. The stock trades about -0.34 of its potential returns per unit of risk. The Kilroy Realty Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,940  in Kilroy Realty Corp on September 28, 2024 and sell it today you would lose (20.00) from holding Kilroy Realty Corp or give up 0.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ameriprise Financial  vs.  Kilroy Realty Corp

Ameriprise Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ameriprise Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Kilroy Realty Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kilroy Realty Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Kilroy Realty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ameriprise Financial and Kilroy Realty

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

The idea behind Ameriprise Financial and Kilroy Realty Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.