Correlation Between CNA Financial and Allstate
Can any of the company-specific risk be diversified away by investing in both CNA Financial 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 CNA Financial and Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNA Financial and The Allstate, you can compare the effects of market volatilities on CNA Financial 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 CNA Financial with a short position of Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNA Financial and Allstate.
Diversification Opportunities for CNA Financial and Allstate
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CNA and Allstate is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CNA Financial and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and CNA Financial 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 CNA Financial 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 CNA Financial i.e., CNA Financial and Allstate go up and down completely randomly.
Pair Corralation between CNA Financial and Allstate
Considering the 90-day investment horizon CNA Financial is expected to generate 1.81 times more return on investment than Allstate. However, CNA Financial is 1.81 times more volatile than The Allstate. It trades about 0.32 of its potential returns per unit of risk. The Allstate is currently generating about -0.13 per unit of risk. If you would invest 4,639 in CNA Financial on September 3, 2024 and sell it today you would earn a total of 343.00 from holding CNA Financial or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNA Financial vs. The Allstate
Performance |
| Timeline |
| CNA Financial |
| Allstate |
CNA Financial and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNA Financial and Allstate
The main advantage of trading using opposite CNA Financial and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNA Financial 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.| CNA Financial vs. Selective Insurance Group | CNA Financial vs. Kemper | CNA Financial vs. Donegal Group B | CNA Financial vs. Argo Group International |
| Allstate vs. Usio Inc | Allstate vs. Arrow Electronics | Allstate vs. WiMi Hologram Cloud | Allstate vs. Fluent Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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