Correlation Between Ameriprise Financial and Logan Ridge

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

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

Diversification Opportunities for Ameriprise Financial and Logan Ridge

0.81

Correlation Coefficient

Ameriprise Financial  Logan Ridge

Very poor diversification

The 3 months correlation between Ameriprise and Logan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Logan Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logan Ridge Finance 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 Logan Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logan Ridge Finance has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Logan Ridge go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Logan Ridge

Considering the 90-day investment horizon Ameriprise Financial is expected to generate 0.94 times more return on investment than Logan Ridge. However, Ameriprise Financial is 1.06 times less risky than Logan Ridge. It trades about 0.25 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.19 per unit of risk. If you would invest  44,067  in Ameriprise Financial on September 2, 2024 and sell it today you would earn a total of  13,330  from holding Ameriprise Financial or generate 30.25% return on investment over 90 days.

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

Ameriprise Financial  vs.  Logan Ridge Finance

Ameriprise Financial

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Ameriprise Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Logan Ridge Finance

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Logan Ridge exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ameriprise Financial and Logan Ridge

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

The idea behind Ameriprise Financial and Logan Ridge Finance 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.