Correlation Between Travelers Companies and Centre Global
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Centre Global 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 Centre Global 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 Centre Global Infrastructure, you can compare the effects of market volatilities on Travelers Companies and Centre Global 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 Centre Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Centre Global.
Diversification Opportunities for Travelers Companies and Centre Global
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Travelers and Centre is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Centre Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centre Global Infras 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 Centre Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centre Global Infras has no effect on the direction of Travelers Companies i.e., Travelers Companies and Centre Global go up and down completely randomly.
Pair Corralation between Travelers Companies and Centre Global
Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the Centre Global. In addition to that, Travelers Companies is 1.7 times more volatile than Centre Global Infrastructure. It trades about -0.19 of its total potential returns per unit of risk. Centre Global Infrastructure is currently generating about -0.05 per unit of volatility. If you would invest 1,222 in Centre Global Infrastructure on September 13, 2024 and sell it today you would lose (9.00) from holding Centre Global Infrastructure or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Travelers Companies vs. Centre Global Infrastructure
Performance |
| Timeline |
| The Travelers Companies |
| Centre Global Infras |
Travelers Companies and Centre Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Centre Global
The main advantage of trading using opposite Travelers Companies and Centre Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Centre Global 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 Centre Global will offset losses from the drop in Centre Global's long position.| Travelers Companies vs. Chubb | Travelers Companies vs. W R Berkley | Travelers Companies vs. The Allstate | Travelers Companies vs. Markel |
| Centre Global vs. Blackrock Conservative Prprdptfinstttnl | Centre Global vs. Allianzgi Diversified Income | Centre Global vs. Elfun Diversified Fund | Centre Global vs. Stone Ridge Diversified |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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