Correlation Between CAP LEASE and Ameriprise Financial

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

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

Diversification Opportunities for CAP LEASE and Ameriprise Financial

-0.78

Correlation Coefficient

CAP LEASE  Ameriprise Financial

Pay attention - limited upside

The 3 months correlation between CAP and Ameriprise is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and CAP LEASE 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 CAP LEASE AVIATION 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 CAP LEASE i.e., CAP LEASE and Ameriprise Financial go up and down completely randomly.

Pair Corralation between CAP LEASE and Ameriprise Financial

Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to generate 0.82 times more return on investment than Ameriprise Financial. However, CAP LEASE AVIATION is 1.22 times less risky than Ameriprise Financial. It trades about 0.23 of its potential returns per unit of risk. Ameriprise Financial is currently generating about -0.25 per unit of risk. If you would invest  48.00  in CAP LEASE AVIATION on October 7, 2024 and sell it today you would earn a total of  2.00  from holding CAP LEASE AVIATION or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

CAP LEASE AVIATION  vs.  Ameriprise Financial

CAP LEASE AVIATION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CAP LEASE AVIATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Ameriprise Financial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Ameriprise Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CAP LEASE and Ameriprise Financial

The main advantage of trading using opposite CAP LEASE and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE 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 CAP LEASE AVIATION 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.