Correlation Between Travelers Companies and Auburn Bancorp
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Auburn Bancorp 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 Travelers Companies and Auburn Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Travelers Companies and Auburn Bancorp, you can compare the effects of market volatilities on Travelers Companies and Auburn Bancorp 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 Travelers Companies with a short position of Auburn Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Auburn Bancorp.
Diversification Opportunities for Travelers Companies and Auburn Bancorp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Auburn is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Auburn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auburn Bancorp and Travelers Companies 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 Travelers Companies are associated (or correlated) with Auburn Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auburn Bancorp has no effect on the direction of Travelers Companies i.e., Travelers Companies and Auburn Bancorp go up and down completely randomly.
Pair Corralation between Travelers Companies and Auburn Bancorp
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.81 times more return on investment than Auburn Bancorp. However, The Travelers Companies is 1.23 times less risky than Auburn Bancorp. It trades about 0.07 of its potential returns per unit of risk. Auburn Bancorp is currently generating about -0.03 per unit of risk. If you would invest 16,621 in The Travelers Companies on December 5, 2024 and sell it today you would earn a total of 9,463 from holding The Travelers Companies or generate 56.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Auburn Bancorp
Performance |
| Timeline |
| The Travelers Companies |
| Auburn Bancorp |
Travelers Companies and Auburn Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Auburn Bancorp
The main advantage of trading using opposite Travelers Companies and Auburn Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Auburn Bancorp 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 Auburn Bancorp will offset losses from the drop in Auburn Bancorp's long position.| Travelers Companies vs. Progressive Corp | ||
| Travelers Companies vs. Chubb | ||
| Travelers Companies vs. Cincinnati Financial | ||
| Travelers Companies vs. W R Berkley |
| Auburn Bancorp vs. Andover Bancorp | ||
| Auburn Bancorp vs. Aozora Bank Ltd | ||
| Auburn Bancorp vs. Absa Group Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |