Correlation Between Ally Financial and ASA Gold
Can any of the company-specific risk be diversified away by investing in both Ally Financial and ASA Gold 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 ASA Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ally Financial and ASA Gold and, you can compare the effects of market volatilities on Ally Financial and ASA Gold 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 ASA Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and ASA Gold.
Diversification Opportunities for Ally Financial and ASA Gold
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ally and ASA is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and ASA Gold and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASA Gold 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 ASA Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASA Gold has no effect on the direction of Ally Financial i.e., Ally Financial and ASA Gold go up and down completely randomly.
Pair Corralation between Ally Financial and ASA Gold
Given the investment horizon of 90 days Ally Financial is expected to under-perform the ASA Gold. In addition to that, Ally Financial is 1.42 times more volatile than ASA Gold and. It trades about -0.05 of its total potential returns per unit of risk. ASA Gold and is currently generating about 0.02 per unit of volatility. If you would invest 2,017 in ASA Gold and on September 20, 2024 and sell it today you would earn a total of 11.00 from holding ASA Gold and or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ally Financial vs. ASA Gold and
Performance |
| Timeline |
| Ally Financial |
| ASA Gold |
Ally Financial and ASA Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ally Financial and ASA Gold
The main advantage of trading using opposite Ally Financial and ASA Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Financial position performs unexpectedly, ASA Gold 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 ASA Gold will offset losses from the drop in ASA Gold's long position.| Ally Financial vs. American Express | Ally Financial vs. Mastercard | Ally Financial vs. Visa Class A | Ally Financial vs. PayPal Holdings |
| ASA Gold vs. AngloGold Ashanti plc | ASA Gold vs. Sprott Physical Gold | ASA Gold vs. Gold Fields Ltd | ASA Gold vs. Harmony Gold Mining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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