Correlation Between Seaboard and Allstate

Can any of the company-specific risk be diversified away by investing in both Seaboard 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 Seaboard and Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seaboard and The Allstate, you can compare the effects of market volatilities on Seaboard 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 Seaboard with a short position of Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seaboard and Allstate.

Diversification Opportunities for Seaboard and Allstate

-0.58

Correlation Coefficient

Seaboard  Allstate

Excellent diversification

The 3 months correlation between Seaboard and Allstate is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Seaboard and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and Seaboard 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 Seaboard 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 Seaboard i.e., Seaboard and Allstate go up and down completely randomly.

Pair Corralation between Seaboard and Allstate

Assuming the 90 days horizon Seaboard is expected to generate 1.11 times more return on investment than Allstate. However, Seaboard is 1.11 times more volatile than The Allstate. It trades about 0.17 of its potential returns per unit of risk. The Allstate is currently generating about -0.02 per unit of risk. If you would invest  221,799  in Seaboard on April 23, 2025 and sell it today you would earn a total of  40,201  from holding Seaboard or generate 18.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Seaboard  vs.  The Allstate

Seaboard

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seaboard are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Seaboard reported solid returns over the last few months and may actually be approaching a breakup point.

Allstate

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Allstate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Allstate is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Seaboard and Allstate

The main advantage of trading using opposite Seaboard and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seaboard 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.

The idea behind Seaboard and The Allstate 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.