Correlation Between BAXALTA and Ameriprise Financial

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

By analyzing existing cross correlation between BAXALTA INC 525 and Ameriprise Financial, you can compare the effects of market volatilities on BAXALTA 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 BAXALTA with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAXALTA and Ameriprise Financial.

Diversification Opportunities for BAXALTA and Ameriprise Financial

0.0

Correlation Coefficient

BAXALTA  Ameriprise Financial

Pay attention - limited upside

The 3 months correlation between BAXALTA and Ameriprise is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BAXALTA INC 525 and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and BAXALTA 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 BAXALTA INC 525 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 BAXALTA i.e., BAXALTA and Ameriprise Financial go up and down completely randomly.

Pair Corralation between BAXALTA and Ameriprise Financial

If you would invest  54,239  in Ameriprise Financial on October 26, 2024 and sell it today you would earn a total of  1,914  from holding Ameriprise Financial or generate 3.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

BAXALTA INC 525  vs.  Ameriprise Financial

BAXALTA INC 525

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BAXALTA INC 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BAXALTA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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. Even with relatively uncertain primary indicators, Ameriprise Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BAXALTA and Ameriprise Financial

The main advantage of trading using opposite BAXALTA and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAXALTA 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 BAXALTA INC 525 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.