Correlation Between Qurate Retail and Ally Financial
Can any of the company-specific risk be diversified away by investing in both Qurate Retail and Ally 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 Qurate Retail and Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail Series and Ally Financial, you can compare the effects of market volatilities on Qurate Retail and Ally 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 Qurate Retail with a short position of Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Ally Financial.
Diversification Opportunities for Qurate Retail and Ally Financial
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Qurate and Ally is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Ally Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Financial has no effect on the direction of Qurate Retail i.e., Qurate Retail and Ally Financial go up and down completely randomly.
Pair Corralation between Qurate Retail and Ally Financial
Assuming the 90 days trading horizon Qurate Retail Series is expected to under-perform the Ally Financial. In addition to that, Qurate Retail is 2.19 times more volatile than Ally Financial. It trades about -0.02 of its total potential returns per unit of risk. Ally Financial is currently generating about 0.05 per unit of volatility. If you would invest 2,365 in Ally Financial on September 2, 2024 and sell it today you would earn a total of 1,629 from holding Ally Financial or generate 68.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Qurate Retail Series vs. Ally Financial
Performance |
| Timeline |
| Qurate Retail Series |
| Ally Financial |
Qurate Retail and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qurate Retail and Ally Financial
The main advantage of trading using opposite Qurate Retail and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail position performs unexpectedly, Ally 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 Ally Financial will offset losses from the drop in Ally Financial's long position.| Qurate Retail vs. Medical Properties Trust | Qurate Retail vs. Intuitive Investments Group | Qurate Retail vs. Smithson Investment Trust | Qurate Retail vs. Livermore Investments Group |
| Ally Financial vs. Uniper SE | Ally Financial vs. Mulberry Group PLC | Ally Financial vs. London Security Plc | Ally Financial vs. Triad Group PLC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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