Correlation Between Ally Financial and Adriatic Metals
Can any of the company-specific risk be diversified away by investing in both Ally Financial and Adriatic Metals 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 Adriatic Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ally Financial and Adriatic Metals, you can compare the effects of market volatilities on Ally Financial and Adriatic Metals 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 Adriatic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and Adriatic Metals.
Diversification Opportunities for Ally Financial and Adriatic Metals
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ally and Adriatic is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and Adriatic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriatic Metals 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 Adriatic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriatic Metals has no effect on the direction of Ally Financial i.e., Ally Financial and Adriatic Metals go up and down completely randomly.
Pair Corralation between Ally Financial and Adriatic Metals
Assuming the 90 days trading horizon Ally Financial is expected to generate 0.85 times more return on investment than Adriatic Metals. However, Ally Financial is 1.18 times less risky than Adriatic Metals. It trades about 0.17 of its potential returns per unit of risk. Adriatic Metals is currently generating about -0.07 per unit of risk. If you would invest 3,463 in Ally Financial on August 27, 2024 and sell it today you would earn a total of 281.00 from holding Ally Financial or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ally Financial vs. Adriatic Metals
Performance |
| Timeline |
| Ally Financial |
| Adriatic Metals |
Ally Financial and Adriatic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ally Financial and Adriatic Metals
The main advantage of trading using opposite Ally Financial and Adriatic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Financial position performs unexpectedly, Adriatic Metals 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 Adriatic Metals will offset losses from the drop in Adriatic Metals' long position.| Ally Financial vs. Samsung Electronics Co | Ally Financial vs. Samsung Electronics Co | Ally Financial vs. Hyundai Motor | Ally Financial vs. Toyota Motor Corp |
| Adriatic Metals vs. Givaudan SA | Adriatic Metals vs. Antofagasta PLC | Adriatic Metals vs. Centamin PLC | Adriatic Metals vs. Atalaya Mining |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |