Correlation Between Travelers Companies and Galaxy Digital
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Galaxy Digital 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 Galaxy Digital 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 Galaxy Digital Holdings, you can compare the effects of market volatilities on Travelers Companies and Galaxy Digital 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 Galaxy Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Galaxy Digital.
Diversification Opportunities for Travelers Companies and Galaxy Digital
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Galaxy is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Galaxy Digital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Digital Holdings 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 Galaxy Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Digital Holdings has no effect on the direction of Travelers Companies i.e., Travelers Companies and Galaxy Digital go up and down completely randomly.
Pair Corralation between Travelers Companies and Galaxy Digital
Considering the 90-day investment horizon Travelers Companies is expected to generate 2.69 times less return on investment than Galaxy Digital. But when comparing it to its historical volatility, The Travelers Companies is 3.4 times less risky than Galaxy Digital. It trades about 0.13 of its potential returns per unit of risk. Galaxy Digital Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,082 in Galaxy Digital Holdings on September 1, 2024 and sell it today you would earn a total of 729.00 from holding Galaxy Digital Holdings or generate 67.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Galaxy Digital Holdings
Performance |
| Timeline |
| The Travelers Companies |
| Galaxy Digital Holdings |
Travelers Companies and Galaxy Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Galaxy Digital
The main advantage of trading using opposite Travelers Companies and Galaxy Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Galaxy Digital 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 Galaxy Digital will offset losses from the drop in Galaxy Digital'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 |
| Galaxy Digital vs. DeFi Technologies | Galaxy Digital vs. Argo Blockchain PLC | Galaxy Digital vs. DigiMax Global | Galaxy Digital vs. BIG Blockchain Intelligence |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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