Correlation Between BYD and Allstate Corp
Can any of the company-specific risk be diversified away by investing in both BYD 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 BYD and Allstate Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and Allstate Corp, you can compare the effects of market volatilities on BYD 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 BYD with a short position of Allstate Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and Allstate Corp.
Diversification Opportunities for BYD and Allstate Corp
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between BYD and Allstate is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and Allstate Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate Corp and BYD 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 BYD Co 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 BYD i.e., BYD and Allstate Corp go up and down completely randomly.
Pair Corralation between BYD and Allstate Corp
Assuming the 90 days trading horizon BYD Co is expected to generate 3.19 times more return on investment than Allstate Corp. However, BYD is 3.19 times more volatile than Allstate Corp. It trades about 0.03 of its potential returns per unit of risk. Allstate Corp is currently generating about -0.05 per unit of risk. If you would invest 3,560 in BYD Co on October 25, 2024 and sell it today you would earn a total of 0.00 from holding BYD Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
BYD Co vs. Allstate Corp
Performance |
| Timeline |
| BYD Co |
| Allstate Corp |
BYD and Allstate Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and Allstate Corp
The main advantage of trading using opposite BYD and Allstate Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD 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.| BYD vs. LBG Media PLC | BYD vs. Synthomer plc | BYD vs. G5 Entertainment AB | BYD vs. Ecclesiastical Insurance Office |
| 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |