Correlation Between TBC Bank and Ally Financial
Can any of the company-specific risk be diversified away by investing in both TBC Bank 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 TBC Bank and Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TBC Bank Group and Ally Financial, you can compare the effects of market volatilities on TBC Bank 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 TBC Bank with a short position of Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TBC Bank and Ally Financial.
Diversification Opportunities for TBC Bank and Ally Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TBC and Ally is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding TBC Bank Group and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial and TBC Bank 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 TBC Bank 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 TBC Bank i.e., TBC Bank and Ally Financial go up and down completely randomly.
Pair Corralation between TBC Bank and Ally Financial
Assuming the 90 days trading horizon TBC Bank is expected to generate 3.54 times less return on investment than Ally Financial. But when comparing it to its historical volatility, TBC Bank Group is 12.62 times less risky than Ally Financial. It trades about 0.36 of its potential returns per unit of risk. Ally Financial is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,579 in Ally Financial on November 8, 2024 and sell it today you would earn a total of 236.00 from holding Ally Financial or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
TBC Bank Group vs. Ally Financial
Performance |
| Timeline |
| TBC Bank Group |
| Ally Financial |
TBC Bank and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TBC Bank and Ally Financial
The main advantage of trading using opposite TBC Bank and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TBC Bank 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.| TBC Bank vs. Fonix Mobile plc | TBC Bank vs. Abingdon Health Plc | TBC Bank vs. Home Depot | TBC Bank vs. CNH Industrial NV |
| Ally Financial vs. Charter Communications Cl | Ally Financial vs. Ondine Biomedical | Ally Financial vs. Spirent Communications plc | Ally Financial vs. Tata Steel Limited |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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