Correlation Between Travelers Companies and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Cornerstone Strategic 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 Cornerstone Strategic 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 Cornerstone Strategic Return, you can compare the effects of market volatilities on Travelers Companies and Cornerstone Strategic 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 Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Cornerstone Strategic.
Diversification Opportunities for Travelers Companies and Cornerstone Strategic
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Travelers and Cornerstone is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Travelers Companies i.e., Travelers Companies and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between Travelers Companies and Cornerstone Strategic
Considering the 90-day investment horizon Travelers Companies is expected to generate 5.35 times less return on investment than Cornerstone Strategic. In addition to that, Travelers Companies is 1.35 times more volatile than Cornerstone Strategic Return. It trades about 0.05 of its total potential returns per unit of risk. Cornerstone Strategic Return is currently generating about 0.36 per unit of volatility. If you would invest 822.00 in Cornerstone Strategic Return on August 24, 2024 and sell it today you would earn a total of 69.00 from holding Cornerstone Strategic Return or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Cornerstone Strategic Return
Performance |
| Timeline |
| The Travelers Companies |
| Cornerstone Strategic |
Travelers Companies and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Cornerstone Strategic
The main advantage of trading using opposite Travelers Companies and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic's long position.| Travelers Companies vs. Amtech Systems | Travelers Companies vs. Gold Fields Ltd | Travelers Companies vs. Aegean Airlines SA | Travelers Companies vs. Merck Company |
| Cornerstone Strategic vs. MFS Investment Grade | Cornerstone Strategic vs. Eaton Vance National | Cornerstone Strategic vs. Blackrock Muniyield Quality | Cornerstone Strategic vs. Munivest Fund |
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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