Correlation Between Jadestone Energy and Ally Financial
Can any of the company-specific risk be diversified away by investing in both Jadestone Energy 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 Jadestone Energy and Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jadestone Energy and Ally Financial, you can compare the effects of market volatilities on Jadestone Energy 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 Jadestone Energy with a short position of Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jadestone Energy and Ally Financial.
Diversification Opportunities for Jadestone Energy and Ally Financial
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jadestone and Ally is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Jadestone Energy and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial and Jadestone Energy 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 Jadestone Energy 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 Jadestone Energy i.e., Jadestone Energy and Ally Financial go up and down completely randomly.
Pair Corralation between Jadestone Energy and Ally Financial
Assuming the 90 days trading horizon Jadestone Energy is expected to under-perform the Ally Financial. But the stock apears to be less risky and, when comparing its historical volatility, Jadestone Energy is 1.19 times less risky than Ally Financial. The stock trades about -0.06 of its potential returns per unit of risk. The Ally Financial is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,439 in Ally Financial on September 3, 2024 and sell it today you would earn a total of 489.00 from holding Ally Financial or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jadestone Energy vs. Ally Financial
Performance |
| Timeline |
| Jadestone Energy |
| Ally Financial |
Jadestone Energy and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jadestone Energy and Ally Financial
The main advantage of trading using opposite Jadestone Energy and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jadestone Energy 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.| Jadestone Energy vs. Bankers Investment Trust | Jadestone Energy vs. Fresenius Medical Care | Jadestone Energy vs. Creo Medical Group | Jadestone Energy vs. Livermore Investments Group |
| Ally Financial vs. Catalyst Media Group | Ally Financial vs. CATLIN GROUP | Ally Financial vs. RTW Venture Fund | Ally Financial vs. Secure Property Development |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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