Correlation Between Ameriprise Financial and CREDIT AGRICOLE

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

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

Diversification Opportunities for Ameriprise Financial and CREDIT AGRICOLE

-0.85

Correlation Coefficient

Ameriprise Financial  CREDIT AGRICOLE

Pay attention - limited upside

The 3 months correlation between Ameriprise and CREDIT is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and CREDIT AGRICOLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREDIT AGRICOLE 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 CREDIT AGRICOLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CREDIT AGRICOLE has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and CREDIT AGRICOLE go up and down completely randomly.

Pair Corralation between Ameriprise Financial and CREDIT AGRICOLE

Assuming the 90 days horizon Ameriprise Financial is expected to generate 1.75 times more return on investment than CREDIT AGRICOLE. However, Ameriprise Financial is 1.75 times more volatile than CREDIT AGRICOLE. It trades about 0.14 of its potential returns per unit of risk. CREDIT AGRICOLE is currently generating about -0.06 per unit of risk. If you would invest  43,781  in Ameriprise Financial on October 6, 2024 and sell it today you would earn a total of  7,759  from holding Ameriprise Financial or generate 17.72% return on investment over 90 days.

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

Ameriprise Financial  vs.  CREDIT AGRICOLE

Ameriprise Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 11 (%) 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.

CREDIT AGRICOLE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CREDIT AGRICOLE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CREDIT AGRICOLE 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 CREDIT AGRICOLE

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

The idea behind Ameriprise Financial and CREDIT AGRICOLE 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.