Correlation Between Microsoft and TRAVELERS
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By analyzing existing cross correlation between Microsoft and TRAVELERS INS GROUP, you can compare the effects of market volatilities on Microsoft and TRAVELERS 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 Microsoft with a short position of TRAVELERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and TRAVELERS.
Diversification Opportunities for Microsoft and TRAVELERS
Average diversification
The 3 months correlation between Microsoft and TRAVELERS is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and TRAVELERS INS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVELERS INS GROUP and Microsoft 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 Microsoft are associated (or correlated) with TRAVELERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVELERS INS GROUP has no effect on the direction of Microsoft i.e., Microsoft and TRAVELERS go up and down completely randomly.
Pair Corralation between Microsoft and TRAVELERS
Given the investment horizon of 90 days Microsoft is expected to generate 3.89 times more return on investment than TRAVELERS. However, Microsoft is 3.89 times more volatile than TRAVELERS INS GROUP. It trades about -0.01 of its potential returns per unit of risk. TRAVELERS INS GROUP is currently generating about -0.18 per unit of risk. If you would invest 42,574 in Microsoft on August 29, 2024 and sell it today you would lose (275.00) from holding Microsoft or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 39.13% |
| Values | Daily Returns |
Microsoft vs. TRAVELERS INS GROUP
Performance |
| Timeline |
| Microsoft |
| TRAVELERS INS GROUP |
Microsoft and TRAVELERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and TRAVELERS
The main advantage of trading using opposite Microsoft and TRAVELERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, TRAVELERS 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 will offset losses from the drop in TRAVELERS's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| TRAVELERS vs. AEP TEX INC | TRAVELERS vs. US BANK NATIONAL | TRAVELERS vs. Nasdaq Inc | TRAVELERS vs. Vertiv Holdings Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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