Correlation Between Travelers Companies and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and CompuGroup Medical 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 CompuGroup Medical 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 CompuGroup Medical SE, you can compare the effects of market volatilities on Travelers Companies and CompuGroup Medical 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 CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and CompuGroup Medical.
Diversification Opportunities for Travelers Companies and CompuGroup Medical
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Travelers and CompuGroup is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Travelers Companies i.e., Travelers Companies and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Travelers Companies and CompuGroup Medical
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.3 times more return on investment than CompuGroup Medical. However, The Travelers Companies is 3.33 times less risky than CompuGroup Medical. It trades about 0.08 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.07 per unit of risk. If you would invest 17,041 in The Travelers Companies on September 12, 2024 and sell it today you would earn a total of 7,724 from holding The Travelers Companies or generate 45.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.5% |
| Values | Daily Returns |
The Travelers Companies vs. CompuGroup Medical SE
Performance |
| Timeline |
| The Travelers Companies |
| CompuGroup Medical |
Travelers Companies and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and CompuGroup Medical
The main advantage of trading using opposite Travelers Companies and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| Travelers Companies vs. Aeye Inc | Travelers Companies vs. Ep Emerging Markets | Travelers Companies vs. LiCycle Holdings Corp | Travelers Companies vs. SEI Investments |
| CompuGroup Medical vs. Veeva Systems Class | CompuGroup Medical vs. GE HealthCare Technologies | CompuGroup Medical vs. M3 Inc | CompuGroup Medical vs. Solventum Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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