Correlation Between Travelers Companies and Aritzia
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Aritzia 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 Aritzia 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 Aritzia, you can compare the effects of market volatilities on Travelers Companies and Aritzia 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 Aritzia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Aritzia.
Diversification Opportunities for Travelers Companies and Aritzia
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Aritzia is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Aritzia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aritzia 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 Aritzia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aritzia has no effect on the direction of Travelers Companies i.e., Travelers Companies and Aritzia go up and down completely randomly.
Pair Corralation between Travelers Companies and Aritzia
Considering the 90-day investment horizon Travelers Companies is expected to generate 1.29 times less return on investment than Aritzia. But when comparing it to its historical volatility, The Travelers Companies is 2.39 times less risky than Aritzia. It trades about 0.13 of its potential returns per unit of risk. Aritzia is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,600 in Aritzia on September 2, 2024 and sell it today you would earn a total of 735.00 from holding Aritzia or generate 28.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Aritzia
Performance |
| Timeline |
| The Travelers Companies |
| Aritzia |
Travelers Companies and Aritzia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Aritzia
The main advantage of trading using opposite Travelers Companies and Aritzia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Aritzia 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 Aritzia will offset losses from the drop in Aritzia'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 |
| Aritzia vs. Fast Retailing Co | Aritzia vs. Industria de Diseno | Aritzia vs. Shoe Carnival | Aritzia vs. Genesco |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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