Correlation Between Travelers Companies and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and ProShares Trust 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 ProShares Trust 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 ProShares Trust, you can compare the effects of market volatilities on Travelers Companies and ProShares Trust 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 ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and ProShares Trust.
Diversification Opportunities for Travelers Companies and ProShares Trust
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Travelers and ProShares is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares 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 ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Travelers Companies i.e., Travelers Companies and ProShares Trust go up and down completely randomly.
Pair Corralation between Travelers Companies and ProShares Trust
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.21 times more return on investment than ProShares Trust. However, The Travelers Companies is 4.67 times less risky than ProShares Trust. It trades about 0.17 of its potential returns per unit of risk. ProShares Trust is currently generating about -0.2 per unit of risk. If you would invest 23,412 in The Travelers Companies on August 30, 2024 and sell it today you would earn a total of 3,254 from holding The Travelers Companies or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. ProShares Trust
Performance |
| Timeline |
| The Travelers Companies |
| ProShares Trust |
Travelers Companies and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and ProShares Trust
The main advantage of trading using opposite Travelers Companies and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, ProShares Trust 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 ProShares Trust will offset losses from the drop in ProShares Trust's long position.| Travelers Companies vs. Argo Group International | Travelers Companies vs. Donegal Group A | Travelers Companies vs. Selective Insurance Group |
| ProShares Trust vs. Vanguard Total Stock | ProShares Trust vs. SPDR SP 500 | ProShares Trust vs. iShares Core SP | ProShares Trust vs. Vanguard Total Bond |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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