Correlation Between Travelers Companies and Blue Whale
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Blue Whale 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 Blue Whale 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 Blue Whale Acquisition, you can compare the effects of market volatilities on Travelers Companies and Blue Whale 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 Blue Whale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Blue Whale.
Diversification Opportunities for Travelers Companies and Blue Whale
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Blue is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Blue Whale Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Whale 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 Blue Whale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Whale Acquisition has no effect on the direction of Travelers Companies i.e., Travelers Companies and Blue Whale go up and down completely randomly.
Pair Corralation between Travelers Companies and Blue Whale
If you would invest 24,867 in The Travelers Companies on August 30, 2024 and sell it today you would earn a total of 1,799 from holding The Travelers Companies or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
The Travelers Companies vs. Blue Whale Acquisition
Performance |
| Timeline |
| The Travelers Companies |
| Blue Whale Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Blue Whale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Blue Whale
The main advantage of trading using opposite Travelers Companies and Blue Whale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Blue Whale 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 Blue Whale will offset losses from the drop in Blue Whale's long position.| Travelers Companies vs. Argo Group International | Travelers Companies vs. Donegal Group A | Travelers Companies vs. Selective Insurance Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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