Correlation Between Ally Financial and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Ally Financial and Bank of Ireland 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 Bank of Ireland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ally Financial and Bank of Ireland, you can compare the effects of market volatilities on Ally Financial and Bank of Ireland 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 Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and Bank of Ireland.
Diversification Opportunities for Ally Financial and Bank of Ireland
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ally and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and Bank of Ireland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ireland 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 Bank of Ireland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ireland has no effect on the direction of Ally Financial i.e., Ally Financial and Bank of Ireland go up and down completely randomly.
Pair Corralation between Ally Financial and Bank of Ireland
Assuming the 90 days trading horizon Ally Financial is expected to generate 15.46 times more return on investment than Bank of Ireland. However, Ally Financial is 15.46 times more volatile than Bank of Ireland. It trades about 0.1 of its potential returns per unit of risk. Bank of Ireland is currently generating about 0.38 per unit of risk. If you would invest 3,579 in Ally Financial on November 8, 2024 and sell it today you would earn a total of 236.00 from holding Ally Financial or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Ally Financial vs. Bank of Ireland
Performance |
| Timeline |
| Ally Financial |
| Bank of Ireland |
Ally Financial and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ally Financial and Bank of Ireland
The main advantage of trading using opposite Ally Financial and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Financial position performs unexpectedly, Bank of Ireland 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 Bank of Ireland will offset losses from the drop in Bank of Ireland's long position.| Ally Financial vs. Charter Communications Cl | Ally Financial vs. Ondine Biomedical | Ally Financial vs. Spirent Communications plc | Ally Financial vs. Tata Steel Limited |
| Bank of Ireland vs. Amedeo Air Four | Bank of Ireland vs. Systemair AB | Bank of Ireland vs. Central Asia Metals | Bank of Ireland vs. Fair Oaks Income |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |