Correlation Between Alleghany and Markel
Can any of the company-specific risk be diversified away by investing in both Alleghany and Markel 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 Alleghany and Markel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alleghany and Markel, you can compare the effects of market volatilities on Alleghany and Markel 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 Alleghany with a short position of Markel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alleghany and Markel.
Diversification Opportunities for Alleghany and Markel
Very weak diversification
The 3 months correlation between Alleghany and Markel is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Alleghany and Markel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markel and Alleghany 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 Alleghany are associated (or correlated) with Markel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markel has no effect on the direction of Alleghany i.e., Alleghany and Markel go up and down completely randomly.
Pair Corralation between Alleghany and Markel
If you would invest 147,152 in Markel on January 24, 2024 and sell it today you would lose (11.00) from holding Markel or give up 0.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 2.38% |
| Values | Daily Returns |
Alleghany vs. Markel
Performance |
| Timeline |
| Alleghany |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Markel |
Alleghany and Markel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alleghany and Markel
The main advantage of trading using opposite Alleghany and Markel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alleghany position performs unexpectedly, Markel 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 Markel will offset losses from the drop in Markel's long position.| Alleghany vs. Saia Inc | Alleghany vs. Sun Country Airlines | Alleghany vs. Planet Fitness | Alleghany vs. Yuexiu Transport Infrastructure |
| Markel vs. Aquagold International | Markel vs. Thrivent High Yield | Markel vs. Morningstar Unconstrained Allocation | Markel vs. Via Renewables |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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