Correlation Between Marriott International and Ameriprise Financial

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

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

Diversification Opportunities for Marriott International and Ameriprise Financial

0.88

Correlation Coefficient

Marriott International  Ameriprise Financial

Very poor diversification

The 3 months correlation between Marriott and Ameriprise is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Marriott International 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 Marriott International 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 Marriott International i.e., Marriott International and Ameriprise Financial go up and down completely randomly.

Pair Corralation between Marriott International and Ameriprise Financial

Assuming the 90 days trading horizon Marriott International is expected to under-perform the Ameriprise Financial. In addition to that, Marriott International is 1.05 times more volatile than Ameriprise Financial. It trades about -0.19 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about -0.14 per unit of volatility. If you would invest  83,170  in Ameriprise Financial on December 27, 2024 and sell it today you would lose (10,928) from holding Ameriprise Financial or give up 13.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.0%
Values	Daily Returns

Marriott International  vs.  Ameriprise Financial

Marriott International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marriott International 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 somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Marriott International and Ameriprise Financial

The main advantage of trading using opposite Marriott International and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International 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 Marriott International 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 Stocks Directory module to find actively traded stocks across global markets.