Correlation Between Ameriprise Financial and SHERWIN

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Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and SHERWIN 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 SHERWIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and SHERWIN WILLIAMS 45 percent, you can compare the effects of market volatilities on Ameriprise Financial and SHERWIN 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 SHERWIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and SHERWIN.

Diversification Opportunities for Ameriprise Financial and SHERWIN

-0.85
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Ameriprise and SHERWIN is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and SHERWIN WILLIAMS 45 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHERWIN WILLIAMS 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 SHERWIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHERWIN WILLIAMS has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and SHERWIN go up and down completely randomly.

Pair Corralation between Ameriprise Financial and SHERWIN

Considering the 90-day investment horizon Ameriprise Financial is expected to generate 1.34 times more return on investment than SHERWIN. However, Ameriprise Financial is 1.34 times more volatile than SHERWIN WILLIAMS 45 percent. It trades about 0.09 of its potential returns per unit of risk. SHERWIN WILLIAMS 45 percent is currently generating about -0.01 per unit of risk. If you would invest  31,637  in Ameriprise Financial on September 2, 2024 and sell it today you would earn a total of  25,760  from holding Ameriprise Financial or generate 81.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy96.57%
ValuesDaily Returns

Ameriprise Financial  vs.  SHERWIN WILLIAMS 45 percent

 Performance 
       Timeline  
Ameriprise Financial 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
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.
SHERWIN WILLIAMS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SHERWIN WILLIAMS 45 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SHERWIN is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Ameriprise Financial and SHERWIN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ameriprise Financial and SHERWIN

The main advantage of trading using opposite Ameriprise Financial and SHERWIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, SHERWIN 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 SHERWIN will offset losses from the drop in SHERWIN's long position.
The idea behind Ameriprise Financial and SHERWIN WILLIAMS 45 percent 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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