Correlation Between Travelers Companies and Better World
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Better World 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 Better World 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 Better World Acquisition, you can compare the effects of market volatilities on Travelers Companies and Better World 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 Better World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Better World.
Diversification Opportunities for Travelers Companies and Better World
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Better is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Better World Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better World 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 Better World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better World Acquisition has no effect on the direction of Travelers Companies i.e., Travelers Companies and Better World go up and down completely randomly.
Pair Corralation between Travelers Companies and Better World
If you would invest 24,564 in The Travelers Companies on September 2, 2024 and sell it today you would earn a total of 2,040 from holding The Travelers Companies or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
The Travelers Companies vs. Better World Acquisition
Performance |
| Timeline |
| The Travelers Companies |
| Better World Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Better World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Better World
The main advantage of trading using opposite Travelers Companies and Better World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Better World 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 Better World will offset losses from the drop in Better World'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 |
| Better World vs. Amgen Inc | Better World vs. Allient | Better World vs. Mind Technology | Better World vs. Flex |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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