Correlation Between Travelers Companies and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Franklin FTSE 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 Franklin FTSE 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 Franklin FTSE Canada, you can compare the effects of market volatilities on Travelers Companies and Franklin FTSE 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 Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Franklin FTSE.
Diversification Opportunities for Travelers Companies and Franklin FTSE
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Franklin FTSE Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Canada 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 Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Canada has no effect on the direction of Travelers Companies i.e., Travelers Companies and Franklin FTSE go up and down completely randomly.
Pair Corralation between Travelers Companies and Franklin FTSE
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.74 times more return on investment than Franklin FTSE. However, Travelers Companies is 1.74 times more volatile than Franklin FTSE Canada. It trades about 0.12 of its potential returns per unit of risk. Franklin FTSE Canada is currently generating about 0.11 per unit of risk. If you would invest 17,968 in The Travelers Companies on August 29, 2024 and sell it today you would earn a total of 8,724 from holding The Travelers Companies or generate 48.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Franklin FTSE Canada
Performance |
| Timeline |
| The Travelers Companies |
| Franklin FTSE Canada |
Travelers Companies and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Franklin FTSE
The main advantage of trading using opposite Travelers Companies and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| Travelers Companies vs. Argo Group International | Travelers Companies vs. NI Holdings | Travelers Companies vs. Donegal Group A | Travelers Companies vs. Selective Insurance Group |
| Franklin FTSE vs. iShares MSCI Ireland | Franklin FTSE vs. iShares MSCI Israel | Franklin FTSE vs. iShares MSCI Philippines | Franklin FTSE vs. iShares MSCI Poland |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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