Correlation Between Travelers Companies and Atco Mining
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Atco Mining 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 Atco Mining 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 Atco Mining, you can compare the effects of market volatilities on Travelers Companies and Atco Mining 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 Atco Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Atco Mining.
Diversification Opportunities for Travelers Companies and Atco Mining
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Atco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Atco Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atco Mining 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 Atco Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atco Mining has no effect on the direction of Travelers Companies i.e., Travelers Companies and Atco Mining go up and down completely randomly.
Pair Corralation between Travelers Companies and Atco Mining
Considering the 90-day investment horizon Travelers Companies is expected to generate 7.12 times less return on investment than Atco Mining. But when comparing it to its historical volatility, The Travelers Companies is 11.24 times less risky than Atco Mining. It trades about 0.06 of its potential returns per unit of risk. Atco Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Atco Mining on August 29, 2024 and sell it today you would lose (12.73) from holding Atco Mining or give up 90.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.08% |
| Values | Daily Returns |
The Travelers Companies vs. Atco Mining
Performance |
| Timeline |
| The Travelers Companies |
| Atco Mining |
Travelers Companies and Atco Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Atco Mining
The main advantage of trading using opposite Travelers Companies and Atco Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Atco Mining 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 Atco Mining will offset losses from the drop in Atco Mining's long position.| Travelers Companies vs. Global Indemnity PLC | Travelers Companies vs. Argo Group International | Travelers Companies vs. Selective Insurance Group | Travelers Companies vs. NI Holdings |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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