Correlation Between Travelers Companies and Allied Motion
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Allied Motion 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 Allied Motion 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 Allied Motion Technologies, you can compare the effects of market volatilities on Travelers Companies and Allied Motion 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 Allied Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Allied Motion.
Diversification Opportunities for Travelers Companies and Allied Motion
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Allied is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Allied Motion Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Motion Techno 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 Allied Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Motion Techno has no effect on the direction of Travelers Companies i.e., Travelers Companies and Allied Motion go up and down completely randomly.
Pair Corralation between Travelers Companies and Allied Motion
If you would invest 20,845 in The Travelers Companies on August 28, 2024 and sell it today you would earn a total of 5,277 from holding The Travelers Companies or generate 25.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.48% |
| Values | Daily Returns |
The Travelers Companies vs. Allied Motion Technologies
Performance |
| Timeline |
| The Travelers Companies |
| Allied Motion Techno |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Allied Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Allied Motion
The main advantage of trading using opposite Travelers Companies and Allied Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Allied Motion 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 Allied Motion will offset losses from the drop in Allied Motion's long position.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
| Allied Motion vs. Plexus Corp | Allied Motion vs. Sanmina | Allied Motion vs. Bel Fuse A | Allied Motion vs. Methode Electronics |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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