Correlation Between Ameriprise Financial and Zura Bio

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

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

Diversification Opportunities for Ameriprise Financial and Zura Bio

-0.33

Correlation Coefficient

Ameriprise Financial  Zura Bio

Very good diversification

The 3 months correlation between Ameriprise and Zura is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Zura Bio Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zura Bio Limited 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 Zura Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zura Bio Limited has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Zura Bio go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Zura Bio

Considering the 90-day investment horizon Ameriprise Financial is expected to generate 0.3 times more return on investment than Zura Bio. However, Ameriprise Financial is 3.3 times less risky than Zura Bio. It trades about 0.11 of its potential returns per unit of risk. Zura Bio Limited is currently generating about -0.24 per unit of risk. If you would invest  50,301  in Ameriprise Financial on October 25, 2024 and sell it today you would earn a total of  5,852  from holding Ameriprise Financial or generate 11.63% return on investment over 90 days.

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

Ameriprise Financial  vs.  Zura Bio Limited

Ameriprise Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 8 (%) 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.

Zura Bio Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zura Bio Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ameriprise Financial and Zura Bio

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

The idea behind Ameriprise Financial and Zura Bio Limited 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.