Correlation Between Amer Sports, and ALLSTATE

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

By analyzing existing cross correlation between Amer Sports, and ALLSTATE P 328, you can compare the effects of market volatilities on Amer Sports, 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 Amer Sports, with a short position of ALLSTATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and ALLSTATE.

Diversification Opportunities for Amer Sports, and ALLSTATE

-0.6

Correlation Coefficient

Amer Sports,  ALLSTATE

Excellent diversification

The 3 months correlation between Amer and ALLSTATE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and ALLSTATE P 328 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLSTATE P 328 and Amer Sports, 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 Amer Sports, 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 P 328 has no effect on the direction of Amer Sports, i.e., Amer Sports, and ALLSTATE go up and down completely randomly.

Pair Corralation between Amer Sports, and ALLSTATE

Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 4.61 times more return on investment than ALLSTATE. However, Amer Sports, is 4.61 times more volatile than ALLSTATE P 328. It trades about 0.32 of its potential returns per unit of risk. ALLSTATE P 328 is currently generating about -0.24 per unit of risk. If you would invest  2,430  in Amer Sports, on September 23, 2024 and sell it today you would earn a total of  388.00  from holding Amer Sports, or generate 15.97% return on investment over 90 days.

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

Amer Sports,  vs.  ALLSTATE P 328

Amer Sports,

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

ALLSTATE P 328

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALLSTATE P 328 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ALLSTATE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amer Sports, and ALLSTATE

The main advantage of trading using opposite Amer Sports, and ALLSTATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, 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 Amer Sports, and ALLSTATE P 328 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.