Correlation Between Ally Financial and Marui Group

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

By analyzing existing cross correlation between Ally Financial and Marui Group Co, you can compare the effects of market volatilities on Ally Financial and Marui Group 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 Marui Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ally Financial and Marui Group.

Diversification Opportunities for Ally Financial and Marui Group

-0.03

Correlation Coefficient

Ally Financial  Marui Group

Good diversification

The 3 months correlation between Ally and Marui is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and Marui Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marui Group 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 Marui Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marui Group has no effect on the direction of Ally Financial i.e., Ally Financial and Marui Group go up and down completely randomly.

Pair Corralation between Ally Financial and Marui Group

Given the investment horizon of 90 days Ally Financial is expected to under-perform the Marui Group. But the stock apears to be less risky and, when comparing its historical volatility, Ally Financial is 4.33 times less risky than Marui Group. The stock trades about -0.32 of its potential returns per unit of risk. The Marui Group Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,931  in Marui Group Co on September 29, 2024 and sell it today you would earn a total of  497.00  from holding Marui Group Co or generate 16.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Ally Financial  vs.  Marui Group Co

Ally Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ally Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Ally Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Marui Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marui Group Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Marui Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ally Financial and Marui Group

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

The idea behind Ally Financial and Marui Group Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..