Correlation Between CAP LEASE and Ally Financial
Can any of the company-specific risk be diversified away by investing in both CAP LEASE 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 CAP LEASE and Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Ally Financial, you can compare the effects of market volatilities on CAP LEASE 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 CAP LEASE with a short position of Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Ally Financial.
Diversification Opportunities for CAP LEASE and Ally Financial
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAP and Ally is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial and CAP LEASE 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 CAP LEASE AVIATION 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 CAP LEASE i.e., CAP LEASE and Ally Financial go up and down completely randomly.
Pair Corralation between CAP LEASE and Ally Financial
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to under-perform the Ally Financial. But the stock apears to be less risky and, when comparing its historical volatility, CAP LEASE AVIATION is 1.1 times less risky than Ally Financial. The stock trades about -0.38 of its potential returns per unit of risk. The Ally Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,677 in Ally Financial on September 14, 2024 and sell it today you would earn a total of 117.00 from holding Ally Financial or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Ally Financial
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Ally Financial |
CAP LEASE and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Ally Financial
The main advantage of trading using opposite CAP LEASE and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE 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.| CAP LEASE vs. Givaudan SA | CAP LEASE vs. Antofagasta PLC | CAP LEASE vs. Ferrexpo PLC | CAP LEASE vs. Atalaya Mining |
| Ally Financial vs. Cars Inc | Ally Financial vs. Caledonia Mining | Ally Financial vs. CAP LEASE AVIATION | Ally Financial vs. Atalaya 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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