Correlation Between Travelers Companies and Brilliant Acquisition
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Brilliant Acquisition 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 Brilliant Acquisition 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 Brilliant Acquisition Corp, you can compare the effects of market volatilities on Travelers Companies and Brilliant Acquisition 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 Brilliant Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Brilliant Acquisition.
Diversification Opportunities for Travelers Companies and Brilliant Acquisition
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Brilliant is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Brilliant Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brilliant Acquisition 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 Brilliant Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brilliant Acquisition has no effect on the direction of Travelers Companies i.e., Travelers Companies and Brilliant Acquisition go up and down completely randomly.
Pair Corralation between Travelers Companies and Brilliant Acquisition
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 | 4.76% |
| Values | Daily Returns |
The Travelers Companies vs. Brilliant Acquisition Corp
Performance |
| Timeline |
| The Travelers Companies |
| Brilliant Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Brilliant Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Brilliant Acquisition
The main advantage of trading using opposite Travelers Companies and Brilliant Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Brilliant Acquisition 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 Brilliant Acquisition will offset losses from the drop in Brilliant Acquisition'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 |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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