Correlation Between Stericycle and Allstate
Can any of the company-specific risk be diversified away by investing in both Stericycle 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 Stericycle and Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stericycle and The Allstate, you can compare the effects of market volatilities on Stericycle 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 Stericycle with a short position of Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stericycle and Allstate.
Diversification Opportunities for Stericycle and Allstate
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stericycle and Allstate is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Stericycle and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and Stericycle 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 Stericycle 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 Stericycle i.e., Stericycle and Allstate go up and down completely randomly.
Pair Corralation between Stericycle and Allstate
Given the investment horizon of 90 days Stericycle is expected to under-perform the Allstate. In addition to that, Stericycle is 1.15 times more volatile than The Allstate. It trades about 0.0 of its total potential returns per unit of risk. The Allstate is currently generating about 0.05 per unit of volatility. If you would invest 12,146 in The Allstate on January 17, 2024 and sell it today you would earn a total of 4,430 from holding The Allstate or generate 36.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Stericycle vs. The Allstate
Performance |
| Timeline |
| Stericycle |
| Allstate |
Stericycle and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stericycle and Allstate
The main advantage of trading using opposite Stericycle and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stericycle 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.| Stericycle vs. Broadridge Financial Solutions | Stericycle vs. First Advantage Corp | Stericycle vs. Franklin Covey | Stericycle vs. Mistras Group |
| Allstate vs. Aquagold International | Allstate vs. Thrivent High Yield | Allstate vs. Morningstar Unconstrained Allocation | Allstate vs. T Rowe Price |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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