Correlation Between Ameriprise Financial and Regional SAB

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

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

Diversification Opportunities for Ameriprise Financial and Regional SAB

0.34

Correlation Coefficient

Ameriprise Financial  Regional SAB

Weak diversification

The 3 months correlation between Ameriprise and Regional is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Regional SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional SAB de 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 Regional SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional SAB de has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Regional SAB go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Regional SAB

Assuming the 90 days trading horizon Ameriprise Financial is expected to under-perform the Regional SAB. But the stock apears to be less risky and, when comparing its historical volatility, Ameriprise Financial is 7.76 times less risky than Regional SAB. The stock trades about -0.22 of its potential returns per unit of risk. The Regional SAB de is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  11,630  in Regional SAB de on October 26, 2024 and sell it today you would earn a total of  2,075  from holding Regional SAB de or generate 17.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Ameriprise Financial  vs.  Regional SAB de

Ameriprise Financial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ameriprise Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Regional SAB de

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Regional SAB de are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating primary indicators, Regional SAB showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ameriprise Financial and Regional SAB

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

The idea behind Ameriprise Financial and Regional SAB de 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.