Correlation Between TravelCenters and Great Elm
Can any of the company-specific risk be diversified away by investing in both TravelCenters and Great Elm 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 TravelCenters and Great Elm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TravelCenters Of America and Great Elm Capital, you can compare the effects of market volatilities on TravelCenters and Great Elm 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 TravelCenters with a short position of Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of TravelCenters and Great Elm.
Diversification Opportunities for TravelCenters and Great Elm
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TravelCenters and Great is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding TravelCenters Of America and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital and TravelCenters 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 TravelCenters Of America are associated (or correlated) with Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of TravelCenters i.e., TravelCenters and Great Elm go up and down completely randomly.
Pair Corralation between TravelCenters and Great Elm
If you would invest 2,477 in Great Elm Capital on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Great Elm Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TravelCenters Of America vs. Great Elm Capital
Performance |
| Timeline |
| TravelCenters Of America |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Great Elm Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TravelCenters and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TravelCenters and Great Elm
The main advantage of trading using opposite TravelCenters and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TravelCenters position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm's long position.| TravelCenters vs. Sotherly Hotels Series | TravelCenters vs. B Riley Financial | TravelCenters vs. Sotherly Hotels Pref |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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