Correlation Between Ameriprise Financial and Blackstone

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

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

Diversification Opportunities for Ameriprise Financial and Blackstone

0.94

Correlation Coefficient

Ameriprise Financial  Blackstone

Almost no diversification

The 3 months correlation between Ameriprise and Blackstone is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Ameriprise Financial i.e., Ameriprise Financial and Blackstone go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Blackstone

Assuming the 90 days horizon Ameriprise Financial is expected to generate 1.01 times less return on investment than Blackstone. But when comparing it to its historical volatility, Ameriprise Financial is 1.31 times less risky than Blackstone. It trades about 0.12 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  11,677  in Blackstone Group on September 20, 2024 and sell it today you would earn a total of  5,663  from holding Blackstone Group or generate 48.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.6%
Values	Daily Returns

Ameriprise Financial  vs.  Blackstone Group

Ameriprise Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ameriprise Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Blackstone Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blackstone reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ameriprise Financial and Blackstone

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

The idea behind Ameriprise Financial and Blackstone Group 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.