Correlation Between CHIBA BANK and Ameriprise Financial

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

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

Diversification Opportunities for CHIBA BANK and Ameriprise Financial

-0.65

Correlation Coefficient

CHIBA BANK  Ameriprise Financial

Excellent diversification

The 3 months correlation between CHIBA and Ameriprise is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding CHIBA BANK and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and CHIBA BANK 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 CHIBA BANK are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of CHIBA BANK i.e., CHIBA BANK and Ameriprise Financial go up and down completely randomly.

Pair Corralation between CHIBA BANK and Ameriprise Financial

Assuming the 90 days trading horizon CHIBA BANK is expected to generate 0.79 times more return on investment than Ameriprise Financial. However, CHIBA BANK is 1.26 times less risky than Ameriprise Financial. It trades about 0.22 of its potential returns per unit of risk. Ameriprise Financial is currently generating about -0.1 per unit of risk. If you would invest  719.00  in CHIBA BANK on December 30, 2024 and sell it today you would earn a total of  161.00  from holding CHIBA BANK or generate 22.39% return on investment over 90 days.

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

CHIBA BANK  vs.  Ameriprise Financial

CHIBA BANK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CHIBA BANK are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, CHIBA BANK exhibited solid returns over the last few months and may actually be approaching a breakup point.

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. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CHIBA BANK and Ameriprise Financial

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

The idea behind CHIBA BANK and Ameriprise Financial 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.