Correlation Between Ameriprise Financial and El Puerto

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

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

Diversification Opportunities for Ameriprise Financial and El Puerto

-0.65

Correlation Coefficient

Ameriprise Financial  El Puerto

Excellent diversification

The 3 months correlation between Ameriprise and LIVEPOL1 is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and El Puerto de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Puerto de 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 El Puerto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Puerto de has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and El Puerto go up and down completely randomly.

Pair Corralation between Ameriprise Financial and El Puerto

Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 3.56 times more return on investment than El Puerto. However, Ameriprise Financial is 3.56 times more volatile than El Puerto de. It trades about 0.14 of its potential returns per unit of risk. El Puerto de is currently generating about -0.15 per unit of risk. If you would invest  844,750  in Ameriprise Financial on September 13, 2024 and sell it today you would earn a total of  255,727  from holding Ameriprise Financial or generate 30.27% return on investment over 90 days.

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

Ameriprise Financial  vs.  El Puerto de

Ameriprise Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Ameriprise Financial showed solid returns over the last few months and may actually be approaching a breakup point.

El Puerto de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days El Puerto de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Ameriprise Financial and El Puerto

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

The idea behind Ameriprise Financial and El Puerto de 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.