Correlation Between MSAD Insurance and Allstate
Can any of the company-specific risk be diversified away by investing in both MSAD Insurance 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 MSAD Insurance and Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSAD Insurance Group and The Allstate, you can compare the effects of market volatilities on MSAD Insurance 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 MSAD Insurance with a short position of Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSAD Insurance and Allstate.
Diversification Opportunities for MSAD Insurance and Allstate
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between MSAD and Allstate is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MSAD Insurance Group and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and MSAD Insurance 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 MSAD Insurance 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 MSAD Insurance i.e., MSAD Insurance and Allstate go up and down completely randomly.
Pair Corralation between MSAD Insurance and Allstate
Assuming the 90 days horizon MSAD Insurance Group is expected to under-perform the Allstate. In addition to that, MSAD Insurance is 7.19 times more volatile than The Allstate. It trades about -0.06 of its total potential returns per unit of risk. The Allstate is currently generating about 0.16 per unit of volatility. If you would invest 2,623 in The Allstate on November 28, 2024 and sell it today you would earn a total of 17.00 from holding The Allstate or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSAD Insurance Group vs. The Allstate
Performance |
| Timeline |
| MSAD Insurance Group |
| Allstate |
MSAD Insurance and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSAD Insurance and Allstate
The main advantage of trading using opposite MSAD Insurance and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSAD Insurance 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.| MSAD Insurance vs. Mitsubishi Estate Co | MSAD Insurance vs. Sumitomo Mitsui Trust | MSAD Insurance vs. Daiwa House Industry | MSAD Insurance vs. Secom Co Ltd |
| Allstate vs. Aspen Insurance Holdings | Allstate vs. Selective Insurance Group | Allstate vs. Aspen Insurance Holdings | Allstate vs. AmTrust Financial Services |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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