Correlation Between Golub Capital and Ameriprise Financial

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Can any of the company-specific risk be diversified away by investing in both Golub Capital 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 Golub Capital and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golub Capital Bdc and Ameriprise Financial Services, you can compare the effects of market volatilities on Golub Capital 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 Golub Capital with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golub Capital and Ameriprise Financial.

Diversification Opportunities for Golub Capital and Ameriprise Financial

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Golub and Ameriprise is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Golub Capital Bdc and Ameriprise Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Golub Capital 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 Golub Capital Bdc 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 Golub Capital i.e., Golub Capital and Ameriprise Financial go up and down completely randomly.

Pair Corralation between Golub Capital and Ameriprise Financial

Given the investment horizon of 90 days Golub Capital Bdc is expected to under-perform the Ameriprise Financial. But the stock apears to be less risky and, when comparing its historical volatility, Golub Capital Bdc is 1.38 times less risky than Ameriprise Financial. The stock trades about -0.16 of its potential returns per unit of risk. The Ameriprise Financial Services is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  27,686  in Ameriprise Financial Services on July 9, 2022 and sell it today you would lose (563.00)  from holding Ameriprise Financial Services or give up 2.03% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Golub Capital Bdc  vs.  Ameriprise Financial Services

 Performance (%) 
       Timeline  
Golub Capital Bdc 
Golub Performance
0 of 100
Over the last 90 days Golub Capital Bdc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Golub Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Golub Price Channel

Ameriprise Financial 
Ameriprise Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial Services are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Ameriprise Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Ameriprise Price Channel

Golub Capital and Ameriprise Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Golub Capital and Ameriprise Financial

The main advantage of trading using opposite Golub Capital and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golub Capital 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.
Golub Capital vs. Boeing Company
The idea behind Golub Capital Bdc and Ameriprise Financial 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.
Ameriprise Financial vs. Boeing Company
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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