Correlation Between Ameriprise Financial and Public Storage

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

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

Diversification Opportunities for Ameriprise Financial and Public Storage

-0.5

Correlation Coefficient

Ameriprise Financial  Public Storage

Very good diversification

The 3 months correlation between Ameriprise and Public is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Public Storage go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Public Storage

Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 1.25 times more return on investment than Public Storage. However, Ameriprise Financial is 1.25 times more volatile than Public Storage. It trades about 0.25 of its potential returns per unit of risk. Public Storage is currently generating about 0.04 per unit of risk. If you would invest  44,216  in Ameriprise Financial on September 2, 2024 and sell it today you would earn a total of  13,181  from holding Ameriprise Financial or generate 29.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.97%
Values	Daily Returns

Ameriprise Financial  vs.  Public Storage

Ameriprise Financial

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 19 (%) 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.

Public Storage

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Public Storage are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Public Storage is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ameriprise Financial and Public Storage

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

The idea behind Ameriprise Financial and Public Storage 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..