Correlation Between Intel and Travelers Companies
Can any of the company-specific risk be diversified away by investing in both Intel and Travelers Companies 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 Intel and Travelers Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and The Travelers Companies, you can compare the effects of market volatilities on Intel and Travelers Companies 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 Intel with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Travelers Companies.
Diversification Opportunities for Intel and Travelers Companies
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intel and Travelers is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Intel and The Travelers Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Travelers Companies and Intel 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 Intel are associated (or correlated) with Travelers Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Travelers Companies has no effect on the direction of Intel i.e., Intel and Travelers Companies go up and down completely randomly.
Pair Corralation between Intel and Travelers Companies
Given the investment horizon of 90 days Intel is expected to generate 16.58 times less return on investment than Travelers Companies. In addition to that, Intel is 1.47 times more volatile than The Travelers Companies. It trades about 0.01 of its total potential returns per unit of risk. The Travelers Companies is currently generating about 0.15 per unit of volatility. If you would invest 23,412 in The Travelers Companies on August 29, 2024 and sell it today you would earn a total of 2,965 from holding The Travelers Companies or generate 12.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. The Travelers Companies
Performance |
| Timeline |
| Intel |
| The Travelers Companies |
Intel and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Travelers Companies
The main advantage of trading using opposite Intel and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Travelers Companies 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 Travelers Companies will offset losses from the drop in Travelers Companies' long position.| Intel vs. ABIVAX Socit Anonyme | Intel vs. Morningstar Unconstrained Allocation | Intel vs. SPACE | Intel vs. Knife River |
| Travelers Companies vs. Argo Group International | Travelers Companies vs. Donegal Group A | Travelers Companies vs. Selective Insurance Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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