Correlation Between Travelers Companies and Aptus Drawdown
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Aptus Drawdown 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 Aptus Drawdown 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 Aptus Drawdown Managed, you can compare the effects of market volatilities on Travelers Companies and Aptus Drawdown 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 Aptus Drawdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Aptus Drawdown.
Diversification Opportunities for Travelers Companies and Aptus Drawdown
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Aptus is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Aptus Drawdown Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Drawdown Managed 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 Aptus Drawdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Drawdown Managed has no effect on the direction of Travelers Companies i.e., Travelers Companies and Aptus Drawdown go up and down completely randomly.
Pair Corralation between Travelers Companies and Aptus Drawdown
Considering the 90-day investment horizon The Travelers Companies is expected to generate 2.2 times more return on investment than Aptus Drawdown. However, Travelers Companies is 2.2 times more volatile than Aptus Drawdown Managed. It trades about 0.11 of its potential returns per unit of risk. Aptus Drawdown Managed is currently generating about 0.16 per unit of risk. If you would invest 17,850 in The Travelers Companies on August 27, 2024 and sell it today you would earn a total of 8,397 from holding The Travelers Companies or generate 47.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Aptus Drawdown Managed
Performance |
| Timeline |
| The Travelers Companies |
| Aptus Drawdown Managed |
Travelers Companies and Aptus Drawdown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Aptus Drawdown
The main advantage of trading using opposite Travelers Companies and Aptus Drawdown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Aptus Drawdown 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 Aptus Drawdown will offset losses from the drop in Aptus Drawdown's long position.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
| Aptus Drawdown vs. Aptus Collared Income | Aptus Drawdown vs. Aptus Defined Risk | Aptus Drawdown vs. Anfield Equity Sector | Aptus Drawdown vs. Opus Small Cap |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |