Correlation Between Horace Mann and Allstate
Can any of the company-specific risk be diversified away by investing in both Horace Mann 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 Horace Mann and Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horace Mann Educators and The Allstate, you can compare the effects of market volatilities on Horace Mann 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 Horace Mann with a short position of Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horace Mann and Allstate.
Diversification Opportunities for Horace Mann and Allstate
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Horace and Allstate is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Horace Mann Educators and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and Horace Mann 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 Horace Mann Educators 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 Horace Mann i.e., Horace Mann and Allstate go up and down completely randomly.
Pair Corralation between Horace Mann and Allstate
Considering the 90-day investment horizon Horace Mann is expected to generate 12.04 times less return on investment than Allstate. But when comparing it to its historical volatility, Horace Mann Educators is 1.45 times less risky than Allstate. It trades about 0.0 of its potential returns per unit of risk. The Allstate is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 19,195 in The Allstate on November 3, 2024 and sell it today you would earn a total of 38.00 from holding The Allstate or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horace Mann Educators vs. The Allstate
Performance |
| Timeline |
| Horace Mann Educators |
| Allstate |
Horace Mann and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horace Mann and Allstate
The main advantage of trading using opposite Horace Mann and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horace Mann 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.| Horace Mann vs. Kemper | Horace Mann vs. RLI Corp | Horace Mann vs. Global Indemnity PLC | Horace Mann vs. Argo Group International |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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