Correlation Between Ford and ALLSTATE
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By analyzing existing cross correlation between Ford Motor and ALLSTATE P 535, you can compare the effects of market volatilities on Ford 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 Ford with a short position of ALLSTATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ALLSTATE.
Diversification Opportunities for Ford and ALLSTATE
Very good diversification
The 3 months correlation between Ford and ALLSTATE is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and ALLSTATE go up and down completely randomly.
Pair Corralation between Ford and ALLSTATE
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.62 times more return on investment than ALLSTATE. However, Ford is 2.62 times more volatile than ALLSTATE P 535. It trades about 0.17 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 1,033 in Ford Motor on August 31, 2024 and sell it today you would earn a total of 77.00 from holding Ford Motor or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Ford Motor vs. ALLSTATE P 535
Performance |
| Timeline |
| Ford Motor |
| ALLSTATE P 535 |
Ford and ALLSTATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and ALLSTATE
The main advantage of trading using opposite Ford and ALLSTATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.The idea behind Ford Motor and ALLSTATE P 535 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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