Correlation Between Travelers Companies and Argent Mid
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Argent Mid 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 Argent Mid 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 Argent Mid Cap, you can compare the effects of market volatilities on Travelers Companies and Argent Mid 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 Argent Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Argent Mid.
Diversification Opportunities for Travelers Companies and Argent Mid
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Argent is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Argent Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argent Mid Cap 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 Argent Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argent Mid Cap has no effect on the direction of Travelers Companies i.e., Travelers Companies and Argent Mid go up and down completely randomly.
Pair Corralation between Travelers Companies and Argent Mid
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.98 times more return on investment than Argent Mid. However, The Travelers Companies is 1.02 times less risky than Argent Mid. It trades about 0.32 of its potential returns per unit of risk. Argent Mid Cap is currently generating about 0.29 per unit of risk. If you would invest 24,594 in The Travelers Companies on September 1, 2024 and sell it today you would earn a total of 2,010 from holding The Travelers Companies or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Travelers Companies vs. Argent Mid Cap
Performance |
| Timeline |
| The Travelers Companies |
| Argent Mid Cap |
Travelers Companies and Argent Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Argent Mid
The main advantage of trading using opposite Travelers Companies and Argent Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Argent Mid 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 Argent Mid will offset losses from the drop in Argent Mid'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 |
| Argent Mid vs. NGL Energy Partners | Argent Mid vs. Martin Midstream Partners | Argent Mid vs. Delek Logistics Partners |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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