Correlation Between Ameriprise Financial and United Insurance
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and United Insurance 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 United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and United Insurance Holdings, you can compare the effects of market volatilities on Ameriprise Financial and United Insurance 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 United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and United Insurance.
Diversification Opportunities for Ameriprise Financial and United Insurance
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ameriprise and United is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and United Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Insurance Holdings 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 United Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Insurance Holdings has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and United Insurance go up and down completely randomly.
Pair Corralation between Ameriprise Financial and United Insurance
Assuming the 90 days horizon Ameriprise Financial is expected to under-perform the United Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Ameriprise Financial is 1.13 times less risky than United Insurance. The stock trades about -0.1 of its potential returns per unit of risk. The United Insurance Holdings is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,219 in United Insurance Holdings on December 30, 2024 and sell it today you would lose (149.00) from holding United Insurance Holdings or give up 12.22% 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. United Insurance Holdings
Performance |
Timeline |
Ameriprise Financial |
United Insurance Holdings |
Ameriprise Financial and United Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ameriprise Financial and United Insurance
The main advantage of trading using opposite Ameriprise Financial and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, United Insurance 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 United Insurance will offset losses from the drop in United Insurance's long position.Ameriprise Financial vs. SPECTRAL MEDICAL | Ameriprise Financial vs. CompuGroup Medical SE | Ameriprise Financial vs. IMAGIN MEDICAL INC | Ameriprise Financial vs. HK Electric Investments |
United Insurance vs. CDL INVESTMENT | United Insurance vs. VIENNA INSURANCE GR | United Insurance vs. Selective Insurance Group | United Insurance vs. Zurich Insurance Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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