Correlation Between Ally Financial and Mobilezone Holding

Can any of the company-specific risk be diversified away by investing in both Ally Financial and Mobilezone Holding 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 Ally Financial and Mobilezone Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ally Financial and mobilezone holding AG, you can compare the effects of market volatilities on Ally Financial and Mobilezone Holding 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 Ally Financial with a short position of Mobilezone Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and Mobilezone Holding.

Diversification Opportunities for Ally Financial and Mobilezone Holding

0.29

Correlation Coefficient

Ally Financial  Mobilezone Holding

Modest diversification

The 3 months correlation between Ally and Mobilezone is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and mobilezone holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mobilezone holding and Ally Financial 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 Ally Financial are associated (or correlated) with Mobilezone Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mobilezone holding has no effect on the direction of Ally Financial i.e., Ally Financial and Mobilezone Holding go up and down completely randomly.

Pair Corralation between Ally Financial and Mobilezone Holding

Assuming the 90 days trading horizon Ally Financial is expected to generate 0.7 times more return on investment than Mobilezone Holding. However, Ally Financial is 1.43 times less risky than Mobilezone Holding. It trades about 0.1 of its potential returns per unit of risk. mobilezone holding AG is currently generating about -0.09 per unit of risk. If you would invest  3,415  in Ally Financial on September 18, 2024 and sell it today you would earn a total of  356.00  from holding Ally Financial or generate 10.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ally Financial  vs.  mobilezone holding AG

Ally Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ally Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ally Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

mobilezone holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days mobilezone holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ally Financial and Mobilezone Holding

The main advantage of trading using opposite Ally Financial and Mobilezone Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ally Financial position performs unexpectedly, Mobilezone Holding 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 Mobilezone Holding will offset losses from the drop in Mobilezone Holding's long position.

The idea behind Ally Financial and mobilezone holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.