Correlation Between Ameriprise Financial and Aimia

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

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

Diversification Opportunities for Ameriprise Financial and Aimia

0.03

Correlation Coefficient

Ameriprise Financial  Aimia

Significant diversification

The 3 months correlation between Ameriprise and Aimia is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc 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 Aimia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Inc has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Aimia go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Aimia

Considering the 90-day investment horizon Ameriprise Financial is expected to generate 0.64 times more return on investment than Aimia. However, Ameriprise Financial is 1.57 times less risky than Aimia. It trades about -0.1 of its potential returns per unit of risk. Aimia Inc is currently generating about -0.07 per unit of risk. If you would invest  57,239  in Ameriprise Financial on November 29, 2024 and sell it today you would lose (4,712) from holding Ameriprise Financial or give up 8.23% of portfolio value over 90 days.

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

Ameriprise Financial  vs.  Aimia Inc

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 latest uncertain performance, the Stock's primary indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Aimia Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aimia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Ameriprise Financial and Aimia

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

The idea behind Ameriprise Financial and Aimia Inc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.