Correlation Between Travelers Companies and Amex Exploration
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Amex Exploration 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 Amex Exploration 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 Amex Exploration, you can compare the effects of market volatilities on Travelers Companies and Amex Exploration 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 Amex Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Amex Exploration.
Diversification Opportunities for Travelers Companies and Amex Exploration
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Travelers and Amex is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Amex Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amex Exploration 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 Amex Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amex Exploration has no effect on the direction of Travelers Companies i.e., Travelers Companies and Amex Exploration go up and down completely randomly.
Pair Corralation between Travelers Companies and Amex Exploration
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.56 times more return on investment than Amex Exploration. However, The Travelers Companies is 1.79 times less risky than Amex Exploration. It trades about 0.06 of its potential returns per unit of risk. Amex Exploration is currently generating about -0.05 per unit of risk. If you would invest 23,313 in The Travelers Companies on September 12, 2024 and sell it today you would earn a total of 1,452 from holding The Travelers Companies or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Amex Exploration
Performance |
| Timeline |
| The Travelers Companies |
| Amex Exploration |
Travelers Companies and Amex Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Amex Exploration
The main advantage of trading using opposite Travelers Companies and Amex Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Amex Exploration 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 Amex Exploration will offset losses from the drop in Amex Exploration's long position.| Travelers Companies vs. Aeye Inc | Travelers Companies vs. Ep Emerging Markets | Travelers Companies vs. LiCycle Holdings Corp | Travelers Companies vs. SEI Investments |
| Amex Exploration vs. Minnova Corp | Amex Exploration vs. Argo Gold | Amex Exploration vs. Advance Gold Corp | Amex Exploration vs. Blue Star Gold |
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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