Correlation Between ALLSTATE and Constellation Brands
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By analyzing existing cross correlation between ALLSTATE P 555 and Constellation Brands Class, you can compare the effects of market volatilities on ALLSTATE and Constellation Brands 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 Constellation Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLSTATE and Constellation Brands.
Diversification Opportunities for ALLSTATE and Constellation Brands
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ALLSTATE and Constellation is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ALLSTATE P 555 and Constellation Brands Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Brands 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 555 are associated (or correlated) with Constellation Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Brands has no effect on the direction of ALLSTATE i.e., ALLSTATE and Constellation Brands go up and down completely randomly.
Pair Corralation between ALLSTATE and Constellation Brands
Assuming the 90 days trading horizon ALLSTATE P 555 is expected to generate 47.05 times more return on investment than Constellation Brands. However, ALLSTATE is 47.05 times more volatile than Constellation Brands Class. It trades about 0.05 of its potential returns per unit of risk. Constellation Brands Class is currently generating about 0.02 per unit of risk. If you would invest 10,521 in ALLSTATE P 555 on August 27, 2024 and sell it today you would lose (538.00) from holding ALLSTATE P 555 or give up 5.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.41% |
| Values | Daily Returns |
ALLSTATE P 555 vs. Constellation Brands Class
Performance |
| Timeline |
| ALLSTATE P 555 |
| Constellation Brands |
ALLSTATE and Constellation Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALLSTATE and Constellation Brands
The main advantage of trading using opposite ALLSTATE and Constellation Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALLSTATE position performs unexpectedly, Constellation Brands 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 Constellation Brands will offset losses from the drop in Constellation Brands' long position.| ALLSTATE vs. Constellation Brands Class | ALLSTATE vs. PGE Corp | ALLSTATE vs. Kenon Holdings | ALLSTATE vs. WEC Energy Group |
| Constellation Brands vs. Brown Forman | Constellation Brands vs. Duckhorn Portfolio | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman |
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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