Correlation Between Deltex Medical and Ally Financial
Can any of the company-specific risk be diversified away by investing in both Deltex Medical 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 Deltex Medical and Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deltex Medical Group and Ally Financial, you can compare the effects of market volatilities on Deltex Medical 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 Deltex Medical with a short position of Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and Ally Financial.
Diversification Opportunities for Deltex Medical and Ally Financial
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deltex and Ally is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial and Deltex Medical 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 Deltex Medical Group 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 Deltex Medical i.e., Deltex Medical and Ally Financial go up and down completely randomly.
Pair Corralation between Deltex Medical and Ally Financial
Assuming the 90 days trading horizon Deltex Medical Group is expected to under-perform the Ally Financial. In addition to that, Deltex Medical is 1.68 times more volatile than Ally Financial. It trades about -0.08 of its total potential returns per unit of risk. Ally Financial is currently generating about 0.07 per unit of volatility. If you would invest 3,702 in Ally Financial on September 13, 2024 and sell it today you would earn a total of 92.00 from holding Ally Financial or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deltex Medical Group vs. Ally Financial
Performance |
| Timeline |
| Deltex Medical Group |
| Ally Financial |
Deltex Medical and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and Ally Financial
The main advantage of trading using opposite Deltex Medical and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical 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.| Deltex Medical vs. Gaztransport et Technigaz | Deltex Medical vs. Naked Wines plc | Deltex Medical vs. Panther Metals PLC | Deltex Medical vs. Take Two Interactive Software |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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