Correlation Between Ally Financial and Centaur Media
Can any of the company-specific risk be diversified away by investing in both Ally Financial and Centaur Media 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 Centaur Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ally Financial and Centaur Media, you can compare the effects of market volatilities on Ally Financial and Centaur Media 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 Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and Centaur Media.
Diversification Opportunities for Ally Financial and Centaur Media
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ally and Centaur is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Ally Financial i.e., Ally Financial and Centaur Media go up and down completely randomly.
Pair Corralation between Ally Financial and Centaur Media
Assuming the 90 days trading horizon Ally Financial is expected to generate 1.12 times more return on investment than Centaur Media. However, Ally Financial is 1.12 times more volatile than Centaur Media. It trades about 0.05 of its potential returns per unit of risk. Centaur Media is currently generating about -0.02 per unit of risk. If you would invest 2,310 in Ally Financial on August 30, 2024 and sell it today you would earn a total of 1,609 from holding Ally Financial or generate 69.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ally Financial vs. Centaur Media
Performance |
| Timeline |
| Ally Financial |
| Centaur Media |
Ally Financial and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ally Financial and Centaur Media
The main advantage of trading using opposite Ally Financial and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Financial position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| Ally Financial vs. Lendinvest PLC | Ally Financial vs. Neometals | Ally Financial vs. Albion Technology General | Ally Financial vs. Jupiter Fund Management |
| Centaur Media vs. Walmart | Centaur Media vs. BYD Co | Centaur Media vs. Volkswagen AG | Centaur Media vs. Volkswagen AG Non Vtg |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |