Correlation Between Ameriprise Financial and Allient

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

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

Diversification Opportunities for Ameriprise Financial and Allient

0.79

Correlation Coefficient

Ameriprise Financial  Allient

Poor diversification

The 3 months correlation between Ameriprise and Allient is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Allient go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Allient

Considering the 90-day investment horizon Ameriprise Financial is expected to under-perform the Allient. But the stock apears to be less risky and, when comparing its historical volatility, Ameriprise Financial is 2.17 times less risky than Allient. The stock trades about -0.32 of its potential returns per unit of risk. The Allient is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  2,457  in Allient on September 23, 2024 and sell it today you would lose (109.00) from holding Allient or give up 4.44% of portfolio value over 90 days.

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

Ameriprise Financial  vs.  Allient

Ameriprise Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent primary indicators, Ameriprise Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Allient

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ameriprise Financial and Allient

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

The idea behind Ameriprise Financial and Allient 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.