Correlation Between Travelers Companies and Aimia
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Aimia 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 Aimia 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 Aimia Inc, you can compare the effects of market volatilities on Travelers Companies and Aimia 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 Aimia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Aimia.
Diversification Opportunities for Travelers Companies and Aimia
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Aimia is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc 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 Aimia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Inc has no effect on the direction of Travelers Companies i.e., Travelers Companies and Aimia go up and down completely randomly.
Pair Corralation between Travelers Companies and Aimia
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.87 times more return on investment than Aimia. However, The Travelers Companies is 1.15 times less risky than Aimia. It trades about 0.16 of its potential returns per unit of risk. Aimia Inc is currently generating about -0.12 per unit of risk. If you would invest 25,237 in The Travelers Companies on August 29, 2024 and sell it today you would earn a total of 1,140 from holding The Travelers Companies or generate 4.52% 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. Aimia Inc
Performance |
| Timeline |
| The Travelers Companies |
| Aimia Inc |
Travelers Companies and Aimia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Aimia
The main advantage of trading using opposite Travelers Companies and Aimia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Aimia 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 Aimia will offset losses from the drop in Aimia's long position.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
| Aimia vs. Flow Capital Corp | Aimia vs. Ameritrans Capital Corp | Aimia vs. Blackhawk Growth Corp | Aimia vs. Azimut Holding SpA |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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