Correlation Between Travelers Companies and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Dimensional ETF 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 Dimensional ETF 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 Dimensional ETF Trust, you can compare the effects of market volatilities on Travelers Companies and Dimensional ETF 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 Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Dimensional ETF.
Diversification Opportunities for Travelers Companies and Dimensional ETF
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Dimensional is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust 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 Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of Travelers Companies i.e., Travelers Companies and Dimensional ETF go up and down completely randomly.
Pair Corralation between Travelers Companies and Dimensional ETF
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.51 times more return on investment than Dimensional ETF. However, Travelers Companies is 1.51 times more volatile than Dimensional ETF Trust. It trades about 0.06 of its potential returns per unit of risk. Dimensional ETF Trust is currently generating about 0.06 per unit of risk. If you would invest 17,960 in The Travelers Companies on August 24, 2024 and sell it today you would earn a total of 8,156 from holding The Travelers Companies or generate 45.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Dimensional ETF Trust
Performance |
| Timeline |
| The Travelers Companies |
| Dimensional ETF Trust |
Travelers Companies and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Dimensional ETF
The main advantage of trading using opposite Travelers Companies and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Dimensional ETF 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 Dimensional ETF will offset losses from the drop in Dimensional ETF'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 |
| Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional International Value | Dimensional ETF vs. Dimensional Targeted Value |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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