Correlation Between Ameriprise Financial and Abingdon Health

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

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

Diversification Opportunities for Ameriprise Financial and Abingdon Health

-0.82

Correlation Coefficient

Ameriprise Financial  Abingdon Health

Pay attention - limited upside

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

Pair Corralation between Ameriprise Financial and Abingdon Health

Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 1.74 times less return on investment than Abingdon Health. But when comparing it to its historical volatility, Ameriprise Financial is 3.05 times less risky than Abingdon Health. It trades about 0.08 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  475.00  in Abingdon Health Plc on October 7, 2024 and sell it today you would earn a total of  300.00  from holding Abingdon Health Plc or generate 63.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.59%
Values	Daily Returns

Ameriprise Financial  vs.  Abingdon Health Plc

Ameriprise Financial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Ameriprise Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Abingdon Health Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abingdon Health Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ameriprise Financial and Abingdon Health

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

The idea behind Ameriprise Financial and Abingdon Health 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.

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 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.