Correlation Between Telecom Argentina and Ameriprise Financial

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

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

Diversification Opportunities for Telecom Argentina and Ameriprise Financial

0.58

Correlation Coefficient

Telecom Argentina  Ameriprise Financial

Very weak diversification

The 3 months correlation between Telecom and Ameriprise is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Telecom Argentina 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 Telecom Argentina SA 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 Telecom Argentina i.e., Telecom Argentina and Ameriprise Financial go up and down completely randomly.

Pair Corralation between Telecom Argentina and Ameriprise Financial

Assuming the 90 days horizon Telecom Argentina SA is expected to under-perform the Ameriprise Financial. In addition to that, Telecom Argentina is 2.02 times more volatile than Ameriprise Financial. It trades about -0.11 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about -0.1 per unit of volatility. If you would invest  51,221  in Ameriprise Financial on December 24, 2024 and sell it today you would lose (5,871) from holding Ameriprise Financial or give up 11.46% of portfolio value over 90 days.

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

Telecom Argentina SA  vs.  Ameriprise Financial

Telecom Argentina

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telecom Argentina SA 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 nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 Telecom Argentina and Ameriprise Financial

The main advantage of trading using opposite Telecom Argentina and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina 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 Telecom Argentina SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.