Correlation Between Microsoft and ALLSTATE
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By analyzing existing cross correlation between Microsoft and ALLSTATE P 535, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of ALLSTATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and ALLSTATE.
Diversification Opportunities for Microsoft and ALLSTATE
Weak diversification
The 3 months correlation between Microsoft and ALLSTATE is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft 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 Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and ALLSTATE go up and down completely randomly.
Pair Corralation between Microsoft and ALLSTATE
Given the investment horizon of 90 days Microsoft is expected to under-perform the ALLSTATE. In addition to that, Microsoft is 2.71 times more volatile than ALLSTATE P 535. It trades about -0.33 of its total potential returns per unit of risk. ALLSTATE P 535 is currently generating about 0.11 per unit of volatility. If you would invest 10,050 in ALLSTATE P 535 on November 29, 2024 and sell it today you would earn a total of 133.00 from holding ALLSTATE P 535 or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. ALLSTATE P 535
Performance |
| Timeline |
| Microsoft |
| ALLSTATE P 535 |
Microsoft and ALLSTATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and ALLSTATE
The main advantage of trading using opposite Microsoft and ALLSTATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| ALLSTATE vs. AEP TEX INC | ALLSTATE vs. iShares Global Consumer | ALLSTATE vs. Caterpillar | ALLSTATE vs. 3M Company |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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