Correlation Between WR Berkley and Allstate

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

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

Diversification Opportunities for WR Berkley and Allstate

0.9

Correlation Coefficient

WR Berkley  Allstate

Almost no diversification

The 3 months correlation between WRB-PH and Allstate is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding WR Berkley and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate and WR Berkley 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 WR Berkley 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 WR Berkley i.e., WR Berkley and Allstate go up and down completely randomly.

Pair Corralation between WR Berkley and Allstate

Assuming the 90 days trading horizon WR Berkley is expected to generate 1.35 times less return on investment than Allstate. In addition to that, WR Berkley is 1.08 times more volatile than The Allstate. It trades about 0.11 of its total potential returns per unit of risk. The Allstate is currently generating about 0.16 per unit of volatility. If you would invest  2,016  in The Allstate on May 1, 2025 and sell it today you would earn a total of  135.00  from holding The Allstate or generate 6.7% return on investment over 90 days.

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

WR Berkley  vs.  The Allstate

WR Berkley

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WR Berkley are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, WR Berkley is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Allstate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Allstate are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent essential indicators, Allstate may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with WR Berkley and Allstate

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

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.