Correlation Between Ameriprise Financial and Fidelity National

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

By analyzing existing cross correlation between Ameriprise Financial and Fidelity National Information, you can compare the effects of market volatilities on Ameriprise Financial and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Fidelity National.

Diversification Opportunities for Ameriprise Financial and Fidelity National

0.73

Correlation Coefficient

Ameriprise Financial  Fidelity National

Poor diversification

The 3 months correlation between Ameriprise and Fidelity is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Fidelity National go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Fidelity National

Assuming the 90 days trading horizon Ameriprise Financial is expected to generate 1.23 times more return on investment than Fidelity National. However, Ameriprise Financial is 1.23 times more volatile than Fidelity National Information. It trades about 0.29 of its potential returns per unit of risk. Fidelity National Information is currently generating about 0.14 per unit of risk. If you would invest  62,867  in Ameriprise Financial on September 19, 2024 and sell it today you would earn a total of  19,668  from holding Ameriprise Financial or generate 31.29% 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.  Fidelity National Information

Ameriprise Financial

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Ameriprise Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Fidelity National

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity National Information are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fidelity National may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ameriprise Financial and Fidelity National

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

The idea behind Ameriprise Financial and Fidelity National Information 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.