Correlation Between NYSE Composite and Allstate
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and The Allstate, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Allstate.
Diversification Opportunities for NYSE Composite and Allstate
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Allstate is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Allstate go up and down completely randomly.
Pair Corralation between NYSE Composite and Allstate
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.62 times more return on investment than Allstate. However, NYSE Composite is 1.61 times less risky than Allstate. It trades about 0.11 of its potential returns per unit of risk. The Allstate is currently generating about -0.02 per unit of risk. If you would invest 1,925,354 in NYSE Composite on November 1, 2024 and sell it today you would earn a total of 91,268 from holding NYSE Composite or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. The Allstate
Performance |
| Timeline |
NYSE Composite and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
The Allstate
Pair trading matchups for Allstate
Pair Trading with NYSE Composite and Allstate
The main advantage of trading using opposite NYSE Composite and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Pembina Pipeline | NYSE Composite vs. Precision Drilling | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Transocean |
| Allstate vs. Brighthouse Financial | Allstate vs. First Citizens BancShares | Allstate vs. Northern Trust | Allstate vs. Dime Community Bancshares |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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