Correlation Between Travelers Companies and Unconstrained Emerging
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Unconstrained Emerging 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 Unconstrained Emerging 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 Unconstrained Emerging Markets, you can compare the effects of market volatilities on Travelers Companies and Unconstrained Emerging 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 Unconstrained Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Unconstrained Emerging.
Diversification Opportunities for Travelers Companies and Unconstrained Emerging
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Travelers and Unconstrained is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Unconstrained Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unconstrained Emerging 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 Unconstrained Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unconstrained Emerging has no effect on the direction of Travelers Companies i.e., Travelers Companies and Unconstrained Emerging go up and down completely randomly.
Pair Corralation between Travelers Companies and Unconstrained Emerging
Considering the 90-day investment horizon The Travelers Companies is expected to generate 4.11 times more return on investment than Unconstrained Emerging. However, Travelers Companies is 4.11 times more volatile than Unconstrained Emerging Markets. It trades about 0.07 of its potential returns per unit of risk. Unconstrained Emerging Markets is currently generating about 0.08 per unit of risk. If you would invest 16,664 in The Travelers Companies on November 27, 2024 and sell it today you would earn a total of 8,160 from holding The Travelers Companies or generate 48.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Unconstrained Emerging Markets
Performance |
| Timeline |
| The Travelers Companies |
| Unconstrained Emerging |
Travelers Companies and Unconstrained Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Unconstrained Emerging
The main advantage of trading using opposite Travelers Companies and Unconstrained Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Unconstrained Emerging 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 Unconstrained Emerging will offset losses from the drop in Unconstrained Emerging's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
| Unconstrained Emerging vs. Fisher Large Cap | Unconstrained Emerging vs. M Large Cap | Unconstrained Emerging vs. Jpmorgan Large Cap | Unconstrained Emerging vs. Vest Large Cap |
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 CEOs Directory module to screen CEOs from public companies around the world.
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