Correlation Between Kinsale Capital and Allstate
Can any of the company-specific risk be diversified away by investing in both Kinsale Capital 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 Kinsale Capital and Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinsale Capital Group and The Allstate, you can compare the effects of market volatilities on Kinsale Capital 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 Kinsale Capital with a short position of Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Allstate.
Diversification Opportunities for Kinsale Capital and Allstate
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinsale and Allstate is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and Kinsale Capital 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 Kinsale Capital Group 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 Kinsale Capital i.e., Kinsale Capital and Allstate go up and down completely randomly.
Pair Corralation between Kinsale Capital and Allstate
Given the investment horizon of 90 days Kinsale Capital Group is expected to generate 1.18 times more return on investment than Allstate. However, Kinsale Capital is 1.18 times more volatile than The Allstate. It trades about 0.49 of its potential returns per unit of risk. The Allstate is currently generating about 0.3 per unit of risk. If you would invest 42,982 in Kinsale Capital Group on August 31, 2024 and sell it today you would earn a total of 8,563 from holding Kinsale Capital Group or generate 19.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinsale Capital Group vs. The Allstate
Performance |
| Timeline |
| Kinsale Capital Group |
| Allstate |
Kinsale Capital and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsale Capital and Allstate
The main advantage of trading using opposite Kinsale Capital and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital 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.| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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