Correlation Between Ally Financial and Mitie Group
Can any of the company-specific risk be diversified away by investing in both Ally Financial and Mitie Group 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 Mitie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ally Financial and Mitie Group PLC, you can compare the effects of market volatilities on Ally Financial and Mitie Group 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 Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and Mitie Group.
Diversification Opportunities for Ally Financial and Mitie Group
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ally and Mitie is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and Mitie Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitie Group PLC 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 Mitie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitie Group PLC has no effect on the direction of Ally Financial i.e., Ally Financial and Mitie Group go up and down completely randomly.
Pair Corralation between Ally Financial and Mitie Group
Assuming the 90 days trading horizon Ally Financial is expected to generate 0.79 times more return on investment than Mitie Group. However, Ally Financial is 1.26 times less risky than Mitie Group. It trades about 0.28 of its potential returns per unit of risk. Mitie Group PLC is currently generating about -0.11 per unit of risk. If you would invest 3,439 in Ally Financial on September 4, 2024 and sell it today you would earn a total of 489.00 from holding Ally Financial or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ally Financial vs. Mitie Group PLC
Performance |
| Timeline |
| Ally Financial |
| Mitie Group PLC |
Ally Financial and Mitie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ally Financial and Mitie Group
The main advantage of trading using opposite Ally Financial and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Financial position performs unexpectedly, Mitie Group 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 Mitie Group will offset losses from the drop in Mitie Group's long position.| Ally Financial vs. Beazer Homes USA | Ally Financial vs. Systemair AB | Ally Financial vs. Pets at Home | Ally Financial vs. Ecclesiastical Insurance Office |
| Mitie Group vs. DFS Furniture PLC | Mitie Group vs. Spire Healthcare Group | Mitie Group vs. Worldwide Healthcare Trust | Mitie Group vs. Cairn Homes 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |