Correlation Between PICC Property and Allstate

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

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

Diversification Opportunities for PICC Property and Allstate

0.45

Correlation Coefficient

PICC Property  Allstate

Very weak diversification

The 3 months correlation between PICC and Allstate is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PICC Property and and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and PICC Property 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 PICC Property and 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 PICC Property i.e., PICC Property and Allstate go up and down completely randomly.

Pair Corralation between PICC Property and Allstate

Assuming the 90 days horizon PICC Property and is expected to generate 1.07 times more return on investment than Allstate. However, PICC Property is 1.07 times more volatile than The Allstate. It trades about 0.11 of its potential returns per unit of risk. The Allstate is currently generating about 0.05 per unit of risk. If you would invest  146.00  in PICC Property and on December 29, 2024 and sell it today you would earn a total of  22.00  from holding PICC Property and or generate 15.07% return on investment over 90 days.

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

PICC Property and  vs.  The Allstate

PICC Property

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PICC Property and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PICC Property reported solid returns over the last few months and may actually be approaching a breakup point.

Allstate

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Allstate are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Allstate may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PICC Property and Allstate

The main advantage of trading using opposite PICC Property and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICC Property 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 PICC Property and 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.