Correlation Between Target Healthcare and Ally Financial
Can any of the company-specific risk be diversified away by investing in both Target Healthcare 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 Target Healthcare and Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target Healthcare REIT and Ally Financial, you can compare the effects of market volatilities on Target Healthcare 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 Target Healthcare with a short position of Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target Healthcare and Ally Financial.
Diversification Opportunities for Target Healthcare and Ally Financial
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Target and Ally is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Target Healthcare REIT and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial and Target Healthcare 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 Target Healthcare REIT 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 Target Healthcare i.e., Target Healthcare and Ally Financial go up and down completely randomly.
Pair Corralation between Target Healthcare and Ally Financial
Assuming the 90 days trading horizon Target Healthcare REIT is expected to under-perform the Ally Financial. But the stock apears to be less risky and, when comparing its historical volatility, Target Healthcare REIT is 2.0 times less risky than Ally Financial. The stock trades about -0.19 of its potential returns per unit of risk. The Ally Financial is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,463 in Ally Financial on August 28, 2024 and sell it today you would earn a total of 436.00 from holding Ally Financial or generate 12.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target Healthcare REIT vs. Ally Financial
Performance |
| Timeline |
| Target Healthcare REIT |
| Ally Financial |
Target Healthcare and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target Healthcare and Ally Financial
The main advantage of trading using opposite Target Healthcare and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Healthcare 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.| Target Healthcare vs. Derwent London PLC | Target Healthcare vs. Hammerson PLC | Target Healthcare vs. Workspace Group PLC | Target Healthcare vs. Supermarket Income REIT |
| Ally Financial vs. Schroders Investment Trusts | Ally Financial vs. X FAB Silicon Foundries | Ally Financial vs. Fevertree Drinks Plc | Ally Financial vs. Taylor Maritime Investments |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Transaction History View history of all your transactions and understand their impact on performance |