Correlation Between Dow Jones and ALLSTATE
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By analyzing existing cross correlation between Dow Jones Industrial and ALLSTATE P 535, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of ALLSTATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and ALLSTATE.
Diversification Opportunities for Dow Jones and ALLSTATE
Excellent diversification
The 3 months correlation between Dow and ALLSTATE is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and ALLSTATE P 535 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLSTATE P 535 and Dow Jones 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 Dow Jones Industrial 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 P 535 has no effect on the direction of Dow Jones i.e., Dow Jones and ALLSTATE go up and down completely randomly.
Pair Corralation between Dow Jones and ALLSTATE
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.26 times more return on investment than ALLSTATE. However, Dow Jones is 1.26 times more volatile than ALLSTATE P 535. It trades about 0.29 of its potential returns per unit of risk. ALLSTATE P 535 is currently generating about 0.14 per unit of risk. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Dow Jones Industrial vs. ALLSTATE P 535
Performance |
| Timeline |
Dow Jones and ALLSTATE Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
ALLSTATE P 535
Pair trading matchups for ALLSTATE
Pair Trading with Dow Jones and ALLSTATE
The main advantage of trading using opposite Dow Jones and ALLSTATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| ALLSTATE vs. Live Ventures | ALLSTATE vs. Monster Beverage Corp | ALLSTATE vs. Haverty Furniture Companies | ALLSTATE vs. China Tontine Wines |
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.
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