Correlation Between Volkswagen and Allstate Corp
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Allstate Corp 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 Volkswagen and Allstate Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG Non Vtg and Allstate Corp, you can compare the effects of market volatilities on Volkswagen and Allstate Corp 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 Volkswagen with a short position of Allstate Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Allstate Corp.
Diversification Opportunities for Volkswagen and Allstate Corp
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Volkswagen and Allstate is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG Non Vtg and Allstate Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate Corp and Volkswagen 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 Volkswagen AG Non Vtg are associated (or correlated) with Allstate Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstate Corp has no effect on the direction of Volkswagen i.e., Volkswagen and Allstate Corp go up and down completely randomly.
Pair Corralation between Volkswagen and Allstate Corp
Assuming the 90 days trading horizon Volkswagen AG Non Vtg is expected to under-perform the Allstate Corp. In addition to that, Volkswagen is 1.04 times more volatile than Allstate Corp. It trades about -0.02 of its total potential returns per unit of risk. Allstate Corp is currently generating about 0.06 per unit of volatility. If you would invest 12,350 in Allstate Corp on October 25, 2024 and sell it today you would earn a total of 6,717 from holding Allstate Corp or generate 54.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.18% |
| Values | Daily Returns |
Volkswagen AG Non Vtg vs. Allstate Corp
Performance |
| Timeline |
| Volkswagen AG Non |
| Allstate Corp |
Volkswagen and Allstate Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Allstate Corp
The main advantage of trading using opposite Volkswagen and Allstate Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Allstate Corp 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 Corp will offset losses from the drop in Allstate Corp's long position.| Volkswagen vs. Atresmedia | Volkswagen vs. Centaur Media | Volkswagen vs. AcadeMedia AB | Volkswagen vs. G5 Entertainment AB |
| Allstate Corp vs. Taiwan Semiconductor Manufacturing | Allstate Corp vs. Sabre Insurance Group | Allstate Corp vs. URU Metals | Allstate Corp vs. Blackrock World Mining |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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