Correlation Between Ally Financial and Qurate Retail
Can any of the company-specific risk be diversified away by investing in both Ally Financial and Qurate Retail 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 Ally Financial and Qurate Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ally Financial and Qurate Retail Series, you can compare the effects of market volatilities on Ally Financial and Qurate Retail 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 Ally Financial with a short position of Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and Qurate Retail.
Diversification Opportunities for Ally Financial and Qurate Retail
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ally and Qurate is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series and Ally 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 Ally Financial are associated (or correlated) with Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail Series has no effect on the direction of Ally Financial i.e., Ally Financial and Qurate Retail go up and down completely randomly.
Pair Corralation between Ally Financial and Qurate Retail
Assuming the 90 days trading horizon Ally Financial is expected to generate 0.46 times more return on investment than Qurate Retail. However, Ally Financial is 2.19 times less risky than Qurate Retail. It trades about 0.05 of its potential returns per unit of risk. Qurate Retail Series is currently generating about -0.02 per unit of risk. 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 |
Ally Financial vs. Qurate Retail Series
Performance |
| Timeline |
| Ally Financial |
| Qurate Retail Series |
Ally Financial and Qurate Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ally Financial and Qurate Retail
The main advantage of trading using opposite Ally Financial and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Financial position performs unexpectedly, Qurate Retail 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 Qurate Retail will offset losses from the drop in Qurate Retail's long position.| Ally Financial vs. Uniper SE | Ally Financial vs. Mulberry Group PLC | Ally Financial vs. London Security Plc | Ally Financial vs. Triad Group PLC |
| Qurate Retail vs. Medical Properties Trust | Qurate Retail vs. Intuitive Investments Group | Qurate Retail vs. Smithson Investment Trust | Qurate Retail vs. Livermore Investments Group |
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 .
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