Correlation Between Vita Coco and ALLSTATE

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

By analyzing existing cross correlation between Vita Coco and ALLSTATE P 45, you can compare the effects of market volatilities on Vita Coco 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 Vita Coco with a short position of ALLSTATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Coco and ALLSTATE.

Diversification Opportunities for Vita Coco and ALLSTATE

-0.41

Correlation Coefficient

Vita Coco  ALLSTATE

Very good diversification

The 3 months correlation between Vita and ALLSTATE is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and ALLSTATE P 45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLSTATE P 45 and Vita Coco 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 Vita Coco 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 45 has no effect on the direction of Vita Coco i.e., Vita Coco and ALLSTATE go up and down completely randomly.

Pair Corralation between Vita Coco and ALLSTATE

Given the investment horizon of 90 days Vita Coco is expected to generate 1.0 times more return on investment than ALLSTATE. However, Vita Coco is 1.0 times less risky than ALLSTATE. It trades about 0.0 of its potential returns per unit of risk. ALLSTATE P 45 is currently generating about -0.09 per unit of risk. If you would invest  3,605  in Vita Coco on December 23, 2024 and sell it today you would lose (54.00) from holding Vita Coco or give up 1.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	72.13%
Values	Daily Returns

Vita Coco  vs.  ALLSTATE P 45

Vita Coco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vita Coco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Vita Coco is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

ALLSTATE P 45

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALLSTATE P 45 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for ALLSTATE P 45 investors.

Pair Trading with Vita Coco and ALLSTATE

The main advantage of trading using opposite Vita Coco and ALLSTATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Coco 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 Vita Coco and ALLSTATE P 45 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.