Correlation Between Travelers Companies and Acasti Pharma
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Acasti Pharma 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 Acasti Pharma 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 Acasti Pharma, you can compare the effects of market volatilities on Travelers Companies and Acasti Pharma 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 Acasti Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Acasti Pharma.
Diversification Opportunities for Travelers Companies and Acasti Pharma
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Acasti is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Acasti Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acasti Pharma 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 Acasti Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acasti Pharma has no effect on the direction of Travelers Companies i.e., Travelers Companies and Acasti Pharma go up and down completely randomly.
Pair Corralation between Travelers Companies and Acasti Pharma
Considering the 90-day investment horizon Travelers Companies is expected to generate 1.06 times less return on investment than Acasti Pharma. But when comparing it to its historical volatility, The Travelers Companies is 2.42 times less risky than Acasti Pharma. It trades about 0.13 of its potential returns per unit of risk. Acasti Pharma is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 290.00 in Acasti Pharma on September 1, 2024 and sell it today you would earn a total of 47.00 from holding Acasti Pharma or generate 16.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.75% |
| Values | Daily Returns |
The Travelers Companies vs. Acasti Pharma
Performance |
| Timeline |
| The Travelers Companies |
| Acasti Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Travelers Companies and Acasti Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Acasti Pharma
The main advantage of trading using opposite Travelers Companies and Acasti Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Acasti Pharma 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 Acasti Pharma will offset losses from the drop in Acasti Pharma's long position.| Travelers Companies vs. Selective Insurance Group | Travelers Companies vs. Aquagold International | Travelers Companies vs. Thrivent High Yield | Travelers Companies vs. Morningstar Unconstrained Allocation |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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