Correlation Between Travelers Companies and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Xtrackers MSCI 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 Xtrackers MSCI 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 Xtrackers MSCI Eurozone, you can compare the effects of market volatilities on Travelers Companies and Xtrackers MSCI 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 Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Xtrackers MSCI.
Diversification Opportunities for Travelers Companies and Xtrackers MSCI
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Xtrackers is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Xtrackers MSCI Eurozone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI Eurozone 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 Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI Eurozone has no effect on the direction of Travelers Companies i.e., Travelers Companies and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between Travelers Companies and Xtrackers MSCI
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.56 times more return on investment than Xtrackers MSCI. However, Travelers Companies is 1.56 times more volatile than Xtrackers MSCI Eurozone. It trades about 0.4 of its potential returns per unit of risk. Xtrackers MSCI Eurozone is currently generating about -0.03 per unit of risk. If you would invest 24,281 in The Travelers Companies on September 3, 2024 and sell it today you would earn a total of 2,323 from holding The Travelers Companies or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Xtrackers MSCI Eurozone
Performance |
| Timeline |
| The Travelers Companies |
| Xtrackers MSCI Eurozone |
Travelers Companies and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Xtrackers MSCI
The main advantage of trading using opposite Travelers Companies and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.| Travelers Companies vs. SPACE | Travelers Companies vs. Ampleforth | Travelers Companies vs. ionet | Travelers Companies vs. KIN |
| Xtrackers MSCI vs. Xtrackers MSCI Europe | Xtrackers MSCI vs. Xtrackers MSCI All | Xtrackers MSCI vs. iShares Currency Hedged | Xtrackers MSCI vs. WisdomTree Europe Hedged |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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