Correlation Between Allstate and RLI Corp
Can any of the company-specific risk be diversified away by investing in both Allstate and RLI Corp 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 RLI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Allstate and RLI Corp, you can compare the effects of market volatilities on Allstate and RLI Corp 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 RLI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allstate and RLI Corp.
Diversification Opportunities for Allstate and RLI Corp
Very good diversification
The 3 months correlation between Allstate and RLI is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding The Allstate and RLI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLI Corp 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 RLI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLI Corp has no effect on the direction of Allstate i.e., Allstate and RLI Corp go up and down completely randomly.
Pair Corralation between Allstate and RLI Corp
Assuming the 90 days trading horizon The Allstate is expected to generate 0.57 times more return on investment than RLI Corp. However, The Allstate is 1.76 times less risky than RLI Corp. It trades about 0.29 of its potential returns per unit of risk. RLI Corp is currently generating about -0.1 per unit of risk. If you would invest 1,908 in The Allstate on June 11, 2025 and sell it today you would earn a total of 219.00 from holding The Allstate or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Allstate vs. RLI Corp
Performance |
| Timeline |
| Allstate |
| RLI Corp |
Allstate and RLI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allstate and RLI Corp
The main advantage of trading using opposite Allstate and RLI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allstate position performs unexpectedly, RLI Corp 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 RLI Corp will offset losses from the drop in RLI Corp's long position.| Allstate vs. The Allstate | Allstate vs. MetLife Preferred Stock | Allstate vs. Bank of America | Allstate vs. Capital One Financial |
| RLI Corp vs. Selective Insurance Group | RLI Corp vs. Horace Mann Educators | RLI Corp vs. Kemper | RLI Corp vs. ProAssurance |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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