Correlation Between Ameriprise Financial and Air Transport

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

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

Diversification Opportunities for Ameriprise Financial and Air Transport

0.0

Correlation Coefficient

Ameriprise Financial  Air Transport

Pay attention - limited upside

The 3 months correlation between Ameriprise and Air is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services and Ameriprise Financial 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 Ameriprise Financial are associated (or correlated) with Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Air Transport go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Air Transport

If you would invest  692,442  in Ameriprise Financial on March 14, 2024 and sell it today you would earn a total of  69,499  from holding Ameriprise Financial or generate 10.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ameriprise Financial  vs.  Air Transport Services

Ameriprise Financial

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ameriprise Financial may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Air Transport Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air Transport Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Air Transport is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ameriprise Financial and Air Transport

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

The idea behind Ameriprise Financial and Air Transport Services 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.