Correlation Between Argo Group and Allstate
Can any of the company-specific risk be diversified away by investing in both Argo Group and Allstate 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 Argo Group and Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Group International and The Allstate, you can compare the effects of market volatilities on Argo Group and Allstate 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 Argo Group with a short position of Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and Allstate.
Diversification Opportunities for Argo Group and Allstate
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Argo and Allstate is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group International and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and Argo Group 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 Argo Group International are associated (or correlated) with Allstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstate has no effect on the direction of Argo Group i.e., Argo Group and Allstate go up and down completely randomly.
Pair Corralation between Argo Group and Allstate
Assuming the 90 days trading horizon Argo Group International is expected to generate 0.26 times more return on investment than Allstate. However, Argo Group International is 3.84 times less risky than Allstate. It trades about 0.2 of its potential returns per unit of risk. The Allstate is currently generating about -0.19 per unit of risk. If you would invest 2,474 in Argo Group International on August 24, 2024 and sell it today you would earn a total of 30.00 from holding Argo Group International or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Group International vs. The Allstate
Performance |
| Timeline |
| Argo Group International |
| Allstate |
Argo Group and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Group and Allstate
The main advantage of trading using opposite Argo Group and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Group position performs unexpectedly, Allstate 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 will offset losses from the drop in Allstate's long position.| Argo Group vs. CVR Partners LP | Argo Group vs. Hawkins | Argo Group vs. NETGEAR | Argo Group vs. Amkor Technology |
| Allstate vs. Aspen Insurance Holdings | Allstate vs. The Allstate | Allstate vs. Aspen Insurance Holdings | Allstate vs. AmTrust Financial Services |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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