Correlation Between Ameriprise Financial and Grupo Posadas

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

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

Diversification Opportunities for Ameriprise Financial and Grupo Posadas

-0.71

Correlation Coefficient

Ameriprise Financial  Grupo Posadas

Pay attention - limited upside

The 3 months correlation between Ameriprise and Grupo is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Grupo Posadas SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Posadas SAB 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 Grupo Posadas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Posadas SAB has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Grupo Posadas go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Grupo Posadas

Assuming the 90 days trading horizon Ameriprise Financial is expected to under-perform the Grupo Posadas. In addition to that, Ameriprise Financial is 1.63 times more volatile than Grupo Posadas SAB. It trades about -0.08 of its total potential returns per unit of risk. Grupo Posadas SAB is currently generating about 0.03 per unit of volatility. If you would invest  2,490  in Grupo Posadas SAB on December 25, 2024 and sell it today you would earn a total of  40.00  from holding Grupo Posadas SAB or generate 1.61% return on investment over 90 days.

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

Ameriprise Financial  vs.  Grupo Posadas SAB

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. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Grupo Posadas SAB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Posadas SAB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Grupo Posadas is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ameriprise Financial and Grupo Posadas

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

The idea behind Ameriprise Financial and Grupo Posadas SAB 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.