Correlation Between Ameriprise Financial and Kingsway Financial

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

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

Diversification Opportunities for Ameriprise Financial and Kingsway Financial

0.16

Correlation Coefficient

Ameriprise Financial  Kingsway Financial

Average diversification

The 3 months correlation between Ameriprise and Kingsway is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Kingsway Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsway Financial 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 Kingsway Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsway Financial has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Kingsway Financial go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Kingsway Financial

Considering the 90-day investment horizon Ameriprise Financial is expected to generate 0.73 times more return on investment than Kingsway Financial. However, Ameriprise Financial is 1.37 times less risky than Kingsway Financial. It trades about 0.08 of its potential returns per unit of risk. Kingsway Financial Services is currently generating about 0.01 per unit of risk. If you would invest  32,344  in Ameriprise Financial on October 11, 2024 and sell it today you would earn a total of  21,149  from holding Ameriprise Financial or generate 65.39% return on investment over 90 days.

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

Ameriprise Financial  vs.  Kingsway Financial Services

Ameriprise Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Ameriprise Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kingsway Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kingsway Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Kingsway Financial 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 Kingsway Financial

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

The idea behind Ameriprise Financial and Kingsway Financial Services 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.