Correlation Between Ameriprise Financial and Northern Trust
Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial and Northern Trust 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 Northern Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriprise Financial and Northern Trust, you can compare the effects of market volatilities on Ameriprise Financial and Northern Trust 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 Northern Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Northern Trust.
Diversification Opportunities for Ameriprise Financial and Northern Trust
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ameriprise and Northern is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Northern Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Trust 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 Northern Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Trust has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Northern Trust go up and down completely randomly.
Pair Corralation between Ameriprise Financial and Northern Trust
Considering the 90-day investment horizon Ameriprise Financial is expected to generate 0.63 times more return on investment than Northern Trust. However, Ameriprise Financial is 1.58 times less risky than Northern Trust. It trades about 0.14 of its potential returns per unit of risk. Northern Trust is currently generating about 0.05 per unit of risk. If you would invest 28,972 in Ameriprise Financial on January 19, 2024 and sell it today you would earn a total of 12,291 from holding Ameriprise Financial or generate 42.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ameriprise Financial vs. Northern Trust
Performance |
Timeline |
Ameriprise Financial |
Northern Trust |
Ameriprise Financial and Northern Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ameriprise Financial and Northern Trust
The main advantage of trading using opposite Ameriprise Financial and Northern Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, Northern Trust 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 Northern Trust will offset losses from the drop in Northern Trust's long position.Ameriprise Financial vs. State Street Corp | Ameriprise Financial vs. Bank of New | Ameriprise Financial vs. SEI Investments | Ameriprise Financial vs. Principal Financial Group |
Northern Trust vs. Invesco Plc | Northern Trust vs. Franklin Resources | Northern Trust vs. T Rowe Price | Northern Trust vs. SEI Investments |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |