Correlation Between Travelers Companies and Green River
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Green River 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 Green River 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 Green River Gold, you can compare the effects of market volatilities on Travelers Companies and Green River 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 Green River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Green River.
Diversification Opportunities for Travelers Companies and Green River
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Green is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Green River Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green River Gold 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 Green River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green River Gold has no effect on the direction of Travelers Companies i.e., Travelers Companies and Green River go up and down completely randomly.
Pair Corralation between Travelers Companies and Green River
Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the Green River. But the stock apears to be less risky and, when comparing its historical volatility, The Travelers Companies is 9.6 times less risky than Green River. The stock trades about -0.03 of its potential returns per unit of risk. The Green River Gold is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 0.58 in Green River Gold on October 24, 2024 and sell it today you would earn a total of 0.42 from holding Green River Gold or generate 72.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
The Travelers Companies vs. Green River Gold
Performance |
| Timeline |
| The Travelers Companies |
| Green River Gold |
Travelers Companies and Green River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Green River
The main advantage of trading using opposite Travelers Companies and Green River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Green River 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 Green River will offset losses from the drop in Green River's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
| Green River vs. Dixons Carphone plc | Green River vs. Ceconomy AG ADR | Green River vs. Tandy Leather Factory | Green River vs. Card Factory plc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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