Correlation Between Ally Financial and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both Ally Financial and AfriTin Mining 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 AfriTin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ally Financial and AfriTin Mining, you can compare the effects of market volatilities on Ally Financial and AfriTin Mining 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 AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and AfriTin Mining.
Diversification Opportunities for Ally Financial and AfriTin Mining
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ally and AfriTin is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining 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 AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of Ally Financial i.e., Ally Financial and AfriTin Mining go up and down completely randomly.
Pair Corralation between Ally Financial and AfriTin Mining
Assuming the 90 days trading horizon Ally Financial is expected to generate 0.71 times more return on investment than AfriTin Mining. However, Ally Financial is 1.4 times less risky than AfriTin Mining. It trades about 0.05 of its potential returns per unit of risk. AfriTin Mining is currently generating about -0.07 per unit of risk. If you would invest 2,740 in Ally Financial on September 12, 2024 and sell it today you would earn a total of 1,112 from holding Ally Financial or generate 40.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.44% |
| Values | Daily Returns |
Ally Financial vs. AfriTin Mining
Performance |
| Timeline |
| Ally Financial |
| AfriTin Mining |
Ally Financial and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ally Financial and AfriTin Mining
The main advantage of trading using opposite Ally Financial and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Financial position performs unexpectedly, AfriTin Mining 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.| Ally Financial vs. Air Products Chemicals | Ally Financial vs. X FAB Silicon Foundries | Ally Financial vs. Wheaton Precious Metals | Ally Financial vs. Verizon Communications |
| AfriTin Mining vs. Alior Bank SA | AfriTin Mining vs. Baker Steel Resources | AfriTin Mining vs. National Bank of | AfriTin Mining vs. Ally Financial |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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