Correlation Between NI Holdings and Allstate
Can any of the company-specific risk be diversified away by investing in both NI Holdings 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 NI Holdings and Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and The Allstate, you can compare the effects of market volatilities on NI Holdings 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 NI Holdings with a short position of Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Allstate.
Diversification Opportunities for NI Holdings and Allstate
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NODK and Allstate is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and NI Holdings 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 NI Holdings 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 NI Holdings i.e., NI Holdings and Allstate go up and down completely randomly.
Pair Corralation between NI Holdings and Allstate
Given the investment horizon of 90 days NI Holdings is expected to generate 1.26 times more return on investment than Allstate. However, NI Holdings is 1.26 times more volatile than The Allstate. It trades about 0.08 of its potential returns per unit of risk. The Allstate is currently generating about -0.23 per unit of risk. If you would invest 1,585 in NI Holdings on August 27, 2024 and sell it today you would earn a total of 32.00 from holding NI Holdings or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NI Holdings vs. The Allstate
Performance |
| Timeline |
| NI Holdings |
| Allstate |
NI Holdings and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Allstate
The main advantage of trading using opposite NI Holdings and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings 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.| NI Holdings vs. Horace Mann Educators | NI Holdings vs. Donegal Group A | NI Holdings vs. Global Indemnity PLC | NI Holdings vs. Selective Insurance Group |
| Allstate vs. Aspen Insurance Holdings | Allstate vs. Aspen Insurance Holdings | Allstate vs. AmTrust Financial Services | Allstate 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 CEOs Directory module to screen CEOs from public companies around the world.
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