Correlation Between Allstate and Equitable Holdings
Can any of the company-specific risk be diversified away by investing in both Allstate and Equitable Holdings 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 Equitable Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Allstate and Equitable Holdings, you can compare the effects of market volatilities on Allstate and Equitable Holdings 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 Equitable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allstate and Equitable Holdings.
Diversification Opportunities for Allstate and Equitable Holdings
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Allstate and Equitable is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding The Allstate and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings 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 The Allstate are associated (or correlated) with Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of Allstate i.e., Allstate and Equitable Holdings go up and down completely randomly.
Pair Corralation between Allstate and Equitable Holdings
Assuming the 90 days trading horizon The Allstate is expected to under-perform the Equitable Holdings. In addition to that, Allstate is 1.23 times more volatile than Equitable Holdings. It trades about -0.26 of its total potential returns per unit of risk. Equitable Holdings is currently generating about -0.12 per unit of volatility. If you would invest 2,276 in Equitable Holdings on August 27, 2024 and sell it today you would lose (47.00) from holding Equitable Holdings or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Allstate vs. Equitable Holdings
Performance |
| Timeline |
| Allstate |
| Equitable Holdings |
Allstate and Equitable Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allstate and Equitable Holdings
The main advantage of trading using opposite Allstate and Equitable Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allstate position performs unexpectedly, Equitable Holdings 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 Equitable Holdings will offset losses from the drop in Equitable Holdings' long position.| Allstate vs. Aspen Insurance Holdings | Allstate vs. Aspen Insurance Holdings | Allstate vs. AmTrust Financial Services | Allstate vs. Argo Group International |
| Equitable Holdings vs. Capital One Financial | Equitable Holdings vs. Citizens Financial Group | Equitable Holdings vs. Equitable Holdings | Equitable Holdings vs. MetLife Preferred Stock |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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