Correlation Between Ameriprise Financial and TPG

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

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

Diversification Opportunities for Ameriprise Financial and TPG

0.87

Correlation Coefficient

Ameriprise Financial  TPG

Very poor diversification

The 3 months correlation between Ameriprise and TPG is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and TPG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG 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 TPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Inc has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and TPG go up and down completely randomly.

Pair Corralation between Ameriprise Financial and TPG

Considering the 90-day investment horizon Ameriprise Financial is expected to generate 0.7 times more return on investment than TPG. However, Ameriprise Financial is 1.43 times less risky than TPG. It trades about -0.08 of its potential returns per unit of risk. TPG Inc is currently generating about -0.17 per unit of risk. If you would invest  52,908  in Ameriprise Financial on December 28, 2024 and sell it today you would lose (4,686) from holding Ameriprise Financial or give up 8.86% of portfolio value over 90 days.

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

Ameriprise Financial  vs.  TPG 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.

TPG Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days TPG Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ameriprise Financial and TPG

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

The idea behind Ameriprise Financial and TPG 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.