Correlation Between Ally Financial and Oaktree Specialty
Can any of the company-specific risk be diversified away by investing in both Ally Financial and Oaktree Specialty 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 Oaktree Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ally Financial and Oaktree Specialty Lending, you can compare the effects of market volatilities on Ally Financial and Oaktree Specialty 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 Oaktree Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and Oaktree Specialty.
Diversification Opportunities for Ally Financial and Oaktree Specialty
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ally and Oaktree is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and Oaktree Specialty Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Specialty Lending 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 Oaktree Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Specialty Lending has no effect on the direction of Ally Financial i.e., Ally Financial and Oaktree Specialty go up and down completely randomly.
Pair Corralation between Ally Financial and Oaktree Specialty
Given the investment horizon of 90 days Ally Financial is expected to generate 1.84 times more return on investment than Oaktree Specialty. However, Ally Financial is 1.84 times more volatile than Oaktree Specialty Lending. It trades about 0.25 of its potential returns per unit of risk. Oaktree Specialty Lending is currently generating about 0.02 per unit of risk. If you would invest 3,480 in Ally Financial on August 30, 2024 and sell it today you would earn a total of 469.00 from holding Ally Financial or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ally Financial vs. Oaktree Specialty Lending
Performance |
| Timeline |
| Ally Financial |
| Oaktree Specialty Lending |
Ally Financial and Oaktree Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ally Financial and Oaktree Specialty
The main advantage of trading using opposite Ally Financial and Oaktree Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Financial position performs unexpectedly, Oaktree Specialty 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 Oaktree Specialty will offset losses from the drop in Oaktree Specialty's long position.| Ally Financial vs. American Express | Ally Financial vs. Mastercard | Ally Financial vs. Visa Class A | Ally Financial vs. PayPal Holdings |
| Oaktree Specialty vs. Barings BDC | Oaktree Specialty vs. OneMain Holdings | Oaktree Specialty vs. Runway Growth Finance | Oaktree Specialty vs. Ally Financial |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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