Correlation Between Moneta Money and Ally Financial
Can any of the company-specific risk be diversified away by investing in both Moneta Money and Ally Financial 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 Moneta Money and Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moneta Money Bank and Ally Financial, you can compare the effects of market volatilities on Moneta Money and Ally Financial 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 Moneta Money with a short position of Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moneta Money and Ally Financial.
Diversification Opportunities for Moneta Money and Ally Financial
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Moneta and Ally is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Moneta Money Bank and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial and Moneta Money 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 Moneta Money Bank are associated (or correlated) with Ally Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Financial has no effect on the direction of Moneta Money i.e., Moneta Money and Ally Financial go up and down completely randomly.
Pair Corralation between Moneta Money and Ally Financial
Assuming the 90 days trading horizon Moneta Money is expected to generate 376.5 times less return on investment than Ally Financial. But when comparing it to its historical volatility, Moneta Money Bank is 915.21 times less risky than Ally Financial. It trades about 0.08 of its potential returns per unit of risk. Ally Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,512 in Ally Financial on November 5, 2024 and sell it today you would earn a total of 387.00 from holding Ally Financial or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Moneta Money Bank vs. Ally Financial
Performance |
| Timeline |
| Moneta Money Bank |
| Ally Financial |
Moneta Money and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moneta Money and Ally Financial
The main advantage of trading using opposite Moneta Money and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moneta Money position performs unexpectedly, Ally Financial 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 Ally Financial will offset losses from the drop in Ally Financial's long position.| Moneta Money vs. European Metals Holdings | Moneta Money vs. Cars Inc | Moneta Money vs. URU Metals | Moneta Money vs. Nordic Semiconductor ASA |
| Ally Financial vs. JD Sports Fashion | Ally Financial vs. Universal Display Corp | Ally Financial vs. Medical Properties Trust | Ally Financial vs. Eastinco Mining Exploration |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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