Correlation Between Travelers Companies and IShares ESG
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and IShares ESG 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 IShares ESG 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 iShares ESG Aware, you can compare the effects of market volatilities on Travelers Companies and IShares ESG 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 IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and IShares ESG.
Diversification Opportunities for Travelers Companies and IShares ESG
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Travelers and IShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and iShares ESG Aware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Aware 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 IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG Aware has no effect on the direction of Travelers Companies i.e., Travelers Companies and IShares ESG go up and down completely randomly.
Pair Corralation between Travelers Companies and IShares ESG
Considering the 90-day investment horizon Travelers Companies is expected to generate 1.56 times less return on investment than IShares ESG. In addition to that, Travelers Companies is 2.36 times more volatile than iShares ESG Aware. It trades about 0.07 of its total potential returns per unit of risk. iShares ESG Aware is currently generating about 0.24 per unit of volatility. If you would invest 2,894 in iShares ESG Aware on November 9, 2024 and sell it today you would earn a total of 103.00 from holding iShares ESG Aware or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. iShares ESG Aware
Performance |
| Timeline |
| The Travelers Companies |
| iShares ESG Aware |
Travelers Companies and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and IShares ESG
The main advantage of trading using opposite Travelers Companies and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, IShares ESG 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 IShares ESG will offset losses from the drop in IShares ESG's long position.| Travelers Companies vs. Great Western Minerals | Travelers Companies vs. Enterprise Bancorp | Travelers Companies vs. T Rowe Price | Travelers Companies vs. Aviat Networks |
| IShares ESG vs. Electric Car | IShares ESG vs. JNS Holdings Corp | IShares ESG vs. Plyzer Technologies | IShares ESG vs. Visium Technologies |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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