Correlation Between ALLSTATE and Eltek

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

By analyzing existing cross correlation between ALLSTATE P 535 and Eltek, you can compare the effects of market volatilities on ALLSTATE and Eltek 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 Eltek. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLSTATE and Eltek.

Diversification Opportunities for ALLSTATE and Eltek

-0.25

Correlation Coefficient

ALLSTATE  Eltek

Very good diversification

The 3 months correlation between ALLSTATE and Eltek is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ALLSTATE P 535 and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek 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 ALLSTATE P 535 are associated (or correlated) with Eltek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eltek has no effect on the direction of ALLSTATE i.e., ALLSTATE and Eltek go up and down completely randomly.

Pair Corralation between ALLSTATE and Eltek

Assuming the 90 days trading horizon ALLSTATE P 535 is expected to generate 0.23 times more return on investment than Eltek. However, ALLSTATE P 535 is 4.27 times less risky than Eltek. It trades about 0.02 of its potential returns per unit of risk. Eltek is currently generating about -0.09 per unit of risk. If you would invest  10,012  in ALLSTATE P 535 on December 24, 2024 and sell it today you would earn a total of  79.00  from holding ALLSTATE P 535 or generate 0.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.44%
Values	Daily Returns

ALLSTATE P 535  vs.  Eltek

ALLSTATE P 535

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALLSTATE P 535 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ALLSTATE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eltek

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eltek has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with ALLSTATE and Eltek

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

The idea behind ALLSTATE P 535 and Eltek 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.

Check out your portfolio center.

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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.