Correlation Between Allstate and Atlas Financial

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Can any of the company-specific risk be diversified away by investing in both Allstate and Atlas Financial 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 Atlas Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Allstate and Atlas Financial Holdings, you can compare the effects of market volatilities on Allstate and Atlas Financial 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 Atlas Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allstate and Atlas Financial.

Diversification Opportunities for Allstate and Atlas Financial

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Allstate and Atlas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Allstate and Atlas Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Financial Holdings 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 The Allstate are associated (or correlated) with Atlas Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Financial Holdings has no effect on the direction of Allstate i.e., Allstate and Atlas Financial go up and down completely randomly.

Pair Corralation between Allstate and Atlas Financial

If you would invest  15,515  in The Allstate on January 31, 2024 and sell it today you would earn a total of  1,443  from holding The Allstate or generate 9.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

The Allstate  vs.  Atlas Financial Holdings

 Performance 
       Timeline  
Allstate 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in The Allstate are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Allstate may actually be approaching a critical reversion point that can send shares even higher in May 2024.
Atlas Financial Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Atlas Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Atlas Financial is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Allstate and Atlas Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Allstate and Atlas Financial

The main advantage of trading using opposite Allstate and Atlas Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allstate position performs unexpectedly, Atlas Financial 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 Atlas Financial will offset losses from the drop in Atlas Financial's long position.
The idea behind The Allstate and Atlas Financial Holdings 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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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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