Correlation Between ALLSTATE and Live Ventures

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Can any of the company-specific risk be diversified away by investing in both ALLSTATE and Live Ventures 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 ALLSTATE and Live Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALLSTATE P 535 and Live Ventures, you can compare the effects of market volatilities on ALLSTATE and Live Ventures 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 ALLSTATE with a short position of Live Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLSTATE and Live Ventures.

Diversification Opportunities for ALLSTATE and Live Ventures

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between ALLSTATE and Live is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ALLSTATE P 535 and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures and ALLSTATE 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 ALLSTATE P 535 are associated (or correlated) with Live Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Ventures has no effect on the direction of ALLSTATE i.e., ALLSTATE and Live Ventures go up and down completely randomly.

Pair Corralation between ALLSTATE and Live Ventures

Assuming the 90 days trading horizon ALLSTATE P 535 is expected to generate 0.16 times more return on investment than Live Ventures. However, ALLSTATE P 535 is 6.11 times less risky than Live Ventures. It trades about 0.11 of its potential returns per unit of risk. Live Ventures is currently generating about -0.23 per unit of risk. 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 Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ALLSTATE P 535  vs.  Live Ventures

 Performance 
       Timeline  
ALLSTATE P 535 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ALLSTATE P 535 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ALLSTATE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Live Ventures 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Live Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ALLSTATE and Live Ventures Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ALLSTATE and Live Ventures

The main advantage of trading using opposite ALLSTATE and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALLSTATE position performs unexpectedly, Live Ventures 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 Live Ventures will offset losses from the drop in Live Ventures' long position.
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The idea behind ALLSTATE P 535 and Live Ventures pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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