Ally Financial Stock Volatility

ALLY
 Stock
  

USD 26.12  0.20  0.77%   

Ally Financial secures Sharpe Ratio (or Efficiency) of -0.0724, which signifies that the company had -0.0724% of return per unit of risk over the last 3 months. Macroaxis standpoint towards foreseeing the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Ally Financial exposes twenty-seven different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to confirm Ally Financial mean deviation of 2.41, and Risk Adjusted Performance of (0.12) to double-check the risk estimate we provide.
  
Ally Financial Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Ally Financial daily returns, and it is calculated using variance and standard deviation. We also use Ally Financial's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Ally Financial volatility.

30 Days Market Risk

Very steady

Chance of Distress

30 Days Economic Sensitivity

Actively responds to the market

ESG Sustainability

While most ESG disclosures are voluntary, Ally Financial's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Ally Financial's managers and investors.
Environment Score
Governance Score
Social Score
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Ally Financial can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Ally Financial at lower prices. For example, an investor can purchase Ally Financial stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Ally Financial's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.

Moving against Ally Financial

-0.76HTBKHeritage Commerce CorpPairCorr
-0.66TRVThe Travelers CompaniesPairCorr
-0.65WAFDWashington FederalPairCorr
-0.58METMetLifePairCorr
-0.56WNEBWestern New EnglandPairCorr
-0.53JPMJPMorgan Chase Fiscal Year End 13th of January 2023 PairCorr

Ally Financial Market Sensitivity And Downside Risk

Ally Financial's beta coefficient measures the volatility of Ally Financial stock compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Ally Financial stock's returns against your selected market. In other words, Ally Financial's beta of 1.81 provides an investor with an approximation of how much risk Ally Financial stock can potentially add to one of your existing portfolios.
Ally Financial exhibits very low volatility with skewness of 1.29 and kurtosis of 6.09. However, we advise investors to further study Ally Financial technical indicators to ensure that all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Ally Financial's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Ally Financial's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
3 Months Beta |Analyze Ally Financial Demand Trend
Check current 90 days Ally Financial correlation with market (NYSE Composite)

Ally Financial Beta

    
  1.81  
Ally Financial standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.

Standard Deviation

    
  3.45  
It is essential to understand the difference between upside risk (as represented by Ally Financial's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Ally Financial's daily returns or price. Since the actual investment returns on holding a position in ally financial stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Ally Financial.

Using Ally Financial Put Option to Manage Risk

Put options written on Ally Financial grant holders of the option the right to sell a specified amount of Ally Financial at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Ally Financial Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Ally Financial's position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding Ally Financial will be realized, the loss incurred will be offset by the profits made with the option trade.

Ally Financial's PUT expiring on 2022-12-16

   Profit   
Share
       Ally Financial Price At Expiration  

Current Ally Financial Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2022-12-16 PUT at $22.0-0.06870.04214332022-12-160.05 - 0.10.1View
Put
2022-12-16 PUT at $23.0-0.10690.06614802022-12-160.1 - 0.150.15View
Put
2022-12-16 PUT at $24.0-0.16230.104517912022-12-160.2 - 0.250.21View
Put
2022-12-16 PUT at $25.0-0.29490.1494247972022-12-160.4 - 0.50.45View
Put
2022-12-16 PUT at $26.0-0.46180.184227472022-12-160.7 - 0.80.8View
Put
2022-12-16 PUT at $27.0-0.65430.184710282022-12-161.25 - 1.41.55View
Put
2022-12-16 PUT at $28.0-0.81330.13664302022-12-162.0 - 2.152.35View
Put
2022-12-16 PUT at $29.0-0.90030.08423962022-12-162.85 - 3.13.18View
Put
2022-12-16 PUT at $30.0-0.97160.03489252022-12-163.8 - 4.04.2View
Put
2022-12-16 PUT at $31.0-0.97480.0257802022-12-164.7 - 5.04.9View
Put
2022-12-16 PUT at $32.0-0.92040.041162022-12-165.7 - 6.06.1View
View All Ally Financial Options

Ally Financial Stock Volatility Analysis

Volatility refers to the frequency at which Ally Financial stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Ally Financial's price changes. Investors will then calculate the volatility of Ally Financial's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Ally Financial's volatility:

Historical Volatility

This type of stock volatility measures Ally Financial's fluctuations based on previous trends. It's commonly used to predict Ally Financial's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for Ally Financial's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Ally Financial's to be redeemed at a future date.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. The Median Price line plots median indexes of Ally Financial price series.
.

Ally Financial Projected Return Density Against Market

Given the investment horizon of 90 days the stock has the beta coefficient of 1.811 . This suggests as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Ally Financial will likely underperform.
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Ally Financial or Consumer Finance sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Ally Financial's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Ally Financial stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
The company has a negative alpha, implying that the risk taken by holding this instrument is not justified. Ally Financial is significantly underperforming NYSE Composite.
   Predicted Return Density   
       Returns  
Ally Financial's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how ally financial stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives an Ally Financial Price Volatility?

Several factors can influence a Stock's stock volatility:

Industry

Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

Ally Financial Stock Risk Measures

Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Ally Financial or Consumer Finance sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Ally Financial's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Ally Financial stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision. Given the investment horizon of 90 days the coefficient of variation of Ally Financial is -1382.11. The daily returns are distributed with a variance of 11.9 and standard deviation of 3.45. The mean deviation of Ally Financial is currently at 2.45. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 1.48
α
Alpha over NYSE Composite
-0.48
β
Beta against NYSE Composite1.81
σ
Overall volatility
3.45
Ir
Information ratio -0.12

Ally Financial Stock Return Volatility

Ally Financial historical daily return volatility represents how much of Ally Financial stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company inherits 3.4502% risk (volatility on return distribution) over the 90 days horizon. By contrast, NYSE Composite accepts 12.6051% volatility on return distribution over the 90 days horizon.
 Performance (%) 
       Timeline  

About Ally Financial Volatility

Volatility is a rate at which the price of Ally Financial or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Ally Financial may increase or decrease. In other words, similar to Ally Financial's beta indicator, it measures the risk of Ally Financial and helps estimate the fluctuations that may happen in a short period of time. So if prices of Ally Financial fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.
Last ReportedProjected for 2022
Market Capitalization16.5 B15.4 B

Ally Financial Investment Opportunity

NYSE Composite has a standard deviation of returns of 12.61 and is 3.66 times more volatile than Ally Financial. 29  of all equities and portfolios are less risky than Ally Financial. Compared to the overall equity markets, volatility of historical daily returns of Ally Financial is lower than 29 () of all global equities and portfolios over the last 90 days. Use Ally Financial to enhance the returns of your portfolios. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences a moderate upward volatility. Check odds of Ally Financial to be traded at $28.73 in 90 days.

Poor diversification

The correlation between Ally Financial and NYA is 0.79 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Ally Financial and NYA in the same portfolio, assuming nothing else is changed.

Ally Financial Additional Risk Indicators

The analysis of Ally Financial's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Ally Financial's investment and either accepting that risk or mitigating it. Along with some common measures of Ally Financial stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Ally Financial Suggested Diversification Pairs

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Ally Financial as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Ally Financial's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Ally Financial's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Ally Financial.
Please continue to Trending Equities. You can also try Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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Is Ally Financial's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Ally Financial. If investors know Ally Financial will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Ally Financial listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
(0.54) 
Market Capitalization
7.8 B
Quarterly Revenue Growth YOY
(0.14) 
Return On Assets
0.0114
Return On Equity
0.14
The market value of Ally Financial is measured differently than its book value, which is the value of Ally Financial that is recorded on the company's balance sheet. Investors also form their own opinion of Ally Financial's value that differs from its market value or its book value, called intrinsic value, which is Ally Financial's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Ally Financial's market value can be influenced by many factors that don't directly affect Ally Financial's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Ally Financial's value and its price as these two are different measures arrived at by different means. Investors typically determine Ally Financial value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Ally Financial's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.