Correlation Between Allstate and Allstate

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

By analyzing existing cross correlation between The Allstate and The Allstate, you can compare the effects of market volatilities on Allstate and Allstate 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 Allstate with a short position of Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allstate and Allstate.

Diversification Opportunities for Allstate and Allstate

0.97

Correlation Coefficient

Allstate  Allstate

Almost no diversification

The 3 months correlation between Allstate and Allstate is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding The Allstate and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and Allstate 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 The Allstate are associated (or correlated) with Allstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstate has no effect on the direction of Allstate i.e., Allstate and Allstate go up and down completely randomly.

Pair Corralation between Allstate and Allstate

Assuming the 90 days trading horizon Allstate is expected to generate 2.16 times less return on investment than Allstate. In addition to that, Allstate is 1.03 times more volatile than The Allstate. It trades about 0.01 of its total potential returns per unit of risk. The Allstate is currently generating about 0.01 per unit of volatility. If you would invest  2,160  in The Allstate on October 23, 2024 and sell it today you would earn a total of  69.00  from holding The Allstate or generate 3.19% return on investment over 90 days.

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

The Allstate  vs.  The Allstate

Allstate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Allstate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Preferred Stock's essential indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Allstate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Allstate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Allstate is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Allstate and Allstate

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

The idea behind The Allstate and The Allstate 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.