Correlation Between Abacus Life and Ameriprise Financial

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

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

Diversification Opportunities for Abacus Life and Ameriprise Financial

0.32

Correlation Coefficient

Abacus Life  Ameriprise Financial

Weak diversification

The 3 months correlation between Abacus and Ameriprise is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Life and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Abacus Life 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 Abacus Life are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Abacus Life i.e., Abacus Life and Ameriprise Financial go up and down completely randomly.

Pair Corralation between Abacus Life and Ameriprise Financial

Considering the 90-day investment horizon Abacus Life is expected to generate 1.43 times more return on investment than Ameriprise Financial. However, Abacus Life is 1.43 times more volatile than Ameriprise Financial. It trades about 0.02 of its potential returns per unit of risk. Ameriprise Financial is currently generating about -0.05 per unit of risk. If you would invest  772.00  in Abacus Life on December 20, 2024 and sell it today you would earn a total of  5.00  from holding Abacus Life or generate 0.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Abacus Life  vs.  Ameriprise Financial

Abacus Life

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Abacus Life are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Abacus Life is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Ameriprise Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ameriprise Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Ameriprise Financial is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Abacus Life and Ameriprise Financial

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

The idea behind Abacus Life and Ameriprise Financial 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.