Correlation Between ALLSTATE and Willamette Valley

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

By analyzing existing cross correlation between ALLSTATE P 45 and Willamette Valley Vineyards, you can compare the effects of market volatilities on ALLSTATE and Willamette Valley 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 Willamette Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLSTATE and Willamette Valley.

Diversification Opportunities for ALLSTATE and Willamette Valley

0.14

Correlation Coefficient

ALLSTATE  Willamette Valley

Average diversification

The 3 months correlation between ALLSTATE and Willamette is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ALLSTATE P 45 and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley 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 45 are associated (or correlated) with Willamette Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willamette Valley has no effect on the direction of ALLSTATE i.e., ALLSTATE and Willamette Valley go up and down completely randomly.

Pair Corralation between ALLSTATE and Willamette Valley

Assuming the 90 days trading horizon ALLSTATE P 45 is expected to generate 0.49 times more return on investment than Willamette Valley. However, ALLSTATE P 45 is 2.02 times less risky than Willamette Valley. It trades about 0.11 of its potential returns per unit of risk. Willamette Valley Vineyards is currently generating about 0.03 per unit of risk. If you would invest  8,619  in ALLSTATE P 45 on December 27, 2024 and sell it today you would earn a total of  429.00  from holding ALLSTATE P 45 or generate 4.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	70.0%
Values	Daily Returns

ALLSTATE P 45  vs.  Willamette Valley Vineyards

ALLSTATE P 45

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ALLSTATE P 45 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, ALLSTATE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Willamette Valley

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Willamette Valley Vineyards are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, Willamette Valley is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ALLSTATE and Willamette Valley

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

The idea behind ALLSTATE P 45 and Willamette Valley Vineyards 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 Anywhere module to track or share privately all of your investments from the convenience of any device.