Correlation Between Ameriprise Financial and AMP

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

Diversification Opportunities for Ameriprise Financial and AMP

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Ameriprise Financial and AMP

If you would invest  18,793  in Ameriprise Financial Services on August 29, 2022 and sell it today you would earn a total of  14,448  from holding Ameriprise Financial Services or generate 76.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.2%
ValuesDaily Returns

Ameriprise Financial Services  vs.  AMP LIMITED

 Performance (%) 
       Timeline  
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 unfluctuating primary indicators, Ameriprise Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Ameriprise Price Channel

AMP LIMITED 
AMP Performance
0 of 100
Over the last 90 days AMP LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, AMP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ameriprise Financial and AMP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ameriprise Financial and AMP

The main advantage of trading using opposite Ameriprise Financial and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.
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The idea behind Ameriprise Financial Services and AMP LIMITED 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.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against AMP as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. AMP's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, AMP's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to AMP LIMITED.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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