Correlation Between Pinterest and Travelers Companies
Can any of the company-specific risk be diversified away by investing in both Pinterest 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 Pinterest and Travelers Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and The Travelers Companies, you can compare the effects of market volatilities on Pinterest 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 Pinterest with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Travelers Companies.
Diversification Opportunities for Pinterest and Travelers Companies
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pinterest and Travelers is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest 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 Pinterest 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 Pinterest 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 Pinterest i.e., Pinterest and Travelers Companies go up and down completely randomly.
Pair Corralation between Pinterest and Travelers Companies
Given the investment horizon of 90 days Pinterest is expected to generate 1.8 times less return on investment than Travelers Companies. In addition to that, Pinterest is 1.98 times more volatile than The Travelers Companies. It trades about 0.04 of its total potential returns per unit of risk. The Travelers Companies is currently generating about 0.13 per unit of volatility. If you would invest 16,234 in The Travelers Companies on August 25, 2024 and sell it today you would earn a total of 10,013 from holding The Travelers Companies or generate 61.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinterest vs. The Travelers Companies
Performance |
| Timeline |
| The Travelers Companies |
Pinterest and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and Travelers Companies
The main advantage of trading using opposite Pinterest and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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.| Pinterest vs. Alphabet Inc Class C | Pinterest vs. Twilio Inc | Pinterest vs. Snap Inc | Pinterest vs. Baidu Inc |
| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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