Correlation Between Puhui Wealth and Ameriprise Financial

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

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

Diversification Opportunities for Puhui Wealth and Ameriprise Financial

-0.88

Correlation Coefficient

Puhui Wealth  Ameriprise Financial

Pay attention - limited upside

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

Pair Corralation between Puhui Wealth and Ameriprise Financial

Given the investment horizon of 90 days Puhui Wealth Investment is expected to generate 11.37 times more return on investment than Ameriprise Financial. However, Puhui Wealth is 11.37 times more volatile than Ameriprise Financial. It trades about 0.02 of its potential returns per unit of risk. Ameriprise Financial is currently generating about 0.06 per unit of risk. If you would invest  414.00  in Puhui Wealth Investment on January 26, 2024 and sell it today you would lose (413.96) from holding Puhui Wealth Investment or give up 99.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	54.14%
Values	Daily Returns

Puhui Wealth Investment  vs.  Ameriprise Financial

Puhui Wealth Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Puhui Wealth Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Puhui Wealth is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 invariable primary indicators, Ameriprise Financial is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Puhui Wealth and Ameriprise Financial

The main advantage of trading using opposite Puhui Wealth and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puhui Wealth 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 Puhui Wealth Investment 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.