Correlation Between Omni Health and Ameriprise Financial

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

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

Diversification Opportunities for Omni Health and Ameriprise Financial

-0.31

Correlation Coefficient

Omni Health  Ameriprise Financial

Very good diversification

The 3 months correlation between Omni and Ameriprise is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Omni Health and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Omni Health 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 Omni Health 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 Omni Health i.e., Omni Health and Ameriprise Financial go up and down completely randomly.

Pair Corralation between Omni Health and Ameriprise Financial

If you would invest  41,238  in Ameriprise Financial on February 2, 2024 and sell it today you would earn a total of  106.00  from holding Ameriprise Financial or generate 0.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Omni Health  vs.  Ameriprise Financial

Omni Health

Risk-Adjusted Performance

9 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Omni Health are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Omni Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 unfluctuating primary indicators, Ameriprise Financial may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Omni Health and Ameriprise Financial

The main advantage of trading using opposite Omni Health and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Health 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 Omni Health 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .