Correlation Between Ally Financial and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Ally Financial and Dairy Farm 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 Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ally Financial and Dairy Farm International, you can compare the effects of market volatilities on Ally Financial and Dairy Farm 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 Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and Dairy Farm.
Diversification Opportunities for Ally Financial and Dairy Farm
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ally and Dairy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International 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 Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Ally Financial i.e., Ally Financial and Dairy Farm go up and down completely randomly.
Pair Corralation between Ally Financial and Dairy Farm
If you would invest 3,534 in Ally Financial on November 4, 2024 and sell it today you would earn a total of 365.00 from holding Ally Financial or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ally Financial vs. Dairy Farm International
Performance |
| Timeline |
| Ally Financial |
| Dairy Farm International |
Ally Financial and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ally Financial and Dairy Farm
The main advantage of trading using opposite Ally Financial and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Financial position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Ally Financial vs. Geely Automobile Holdings | Ally Financial vs. Beazer Homes USA | Ally Financial vs. Qurate Retail Series | Ally Financial vs. MTI Wireless Edge |
| Dairy Farm vs. Evolution Gaming Group | Dairy Farm vs. Games Workshop Group | Dairy Farm vs. PPHE Hotel Group | Dairy Farm vs. Hochschild Mining plc |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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