Correlation Between Ameriprise Financial and SIKA AG

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Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and SIKA AG 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 SIKA AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and SIKA AG UNSPADR, you can compare the effects of market volatilities on Ameriprise Financial and SIKA AG 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 SIKA AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and SIKA AG.

Diversification Opportunities for Ameriprise Financial and SIKA AG

AmeripriseSIKADiversified AwayAmeripriseSIKADiversified Away100%
-0.92
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Ameriprise and SIKA is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and SIKA AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIKA AG UNSPADR 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 SIKA AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIKA AG UNSPADR has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and SIKA AG go up and down completely randomly.

Pair Corralation between Ameriprise Financial and SIKA AG

Assuming the 90 days horizon Ameriprise Financial is expected to generate 0.95 times more return on investment than SIKA AG. However, Ameriprise Financial is 1.05 times less risky than SIKA AG. It trades about 0.13 of its potential returns per unit of risk. SIKA AG UNSPADR is currently generating about -0.03 per unit of risk. If you would invest  33,649  in Ameriprise Financial on September 15, 2024 and sell it today you would earn a total of  18,531  from holding Ameriprise Financial or generate 55.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ameriprise Financial  vs.  SIKA AG UNSPADR

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -100102030
JavaScript chart by amCharts 3.21.15A4S SIKB
       Timeline  
Ameriprise Financial 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ameriprise Financial reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec420440460480500520540560
SIKA AG UNSPADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SIKA AG UNSPADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec242526272829

Ameriprise Financial and SIKA AG Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.88-4.41-2.93-1.45-0.02461.573.224.876.528.16 0.050.100.150.20
JavaScript chart by amCharts 3.21.15A4S SIKB
       Returns  

Pair Trading with Ameriprise Financial and SIKA AG

The main advantage of trading using opposite Ameriprise Financial and SIKA AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, SIKA AG 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 SIKA AG will offset losses from the drop in SIKA AG's long position.
The idea behind Ameriprise Financial and SIKA AG UNSPADR 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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