Correlation Between Ameriprise Financial and Electrovaya Common

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

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

Diversification Opportunities for Ameriprise Financial and Electrovaya Common

0.47

Correlation Coefficient

Ameriprise Financial  Electrovaya Common

Very weak diversification

The 3 months correlation between Ameriprise and Electrovaya is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares 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 Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Electrovaya Common go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Electrovaya Common

Considering the 90-day investment horizon Ameriprise Financial is expected to generate 0.38 times more return on investment than Electrovaya Common. However, Ameriprise Financial is 2.61 times less risky than Electrovaya Common. It trades about 0.14 of its potential returns per unit of risk. Electrovaya Common Shares is currently generating about 0.01 per unit of risk. If you would invest  46,072  in Ameriprise Financial on September 22, 2024 and sell it today you would earn a total of  7,140  from holding Ameriprise Financial or generate 15.5% return on investment over 90 days.

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

Ameriprise Financial  vs.  Electrovaya Common Shares

Ameriprise Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal primary indicators, Ameriprise Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Electrovaya Common Shares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Electrovaya Common Shares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Electrovaya Common is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ameriprise Financial and Electrovaya Common

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

The idea behind Ameriprise Financial and Electrovaya Common Shares 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.