Correlation Between Travelers Companies and Whole Earth
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Whole Earth 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 Whole Earth 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 Whole Earth Brands, you can compare the effects of market volatilities on Travelers Companies and Whole Earth 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 Whole Earth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Whole Earth.
Diversification Opportunities for Travelers Companies and Whole Earth
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Whole is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Whole Earth Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whole Earth Brands 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 Whole Earth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whole Earth Brands has no effect on the direction of Travelers Companies i.e., Travelers Companies and Whole Earth go up and down completely randomly.
Pair Corralation between Travelers Companies and Whole Earth
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.11 times more return on investment than Whole Earth. However, The Travelers Companies is 9.06 times less risky than Whole Earth. It trades about 0.13 of its potential returns per unit of risk. Whole Earth Brands is currently generating about -0.15 per unit of risk. If you would invest 20,839 in The Travelers Companies on August 30, 2024 and sell it today you would earn a total of 5,827 from holding The Travelers Companies or generate 27.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 36.51% |
| Values | Daily Returns |
The Travelers Companies vs. Whole Earth Brands
Performance |
| Timeline |
| The Travelers Companies |
| Whole Earth Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Whole Earth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Whole Earth
The main advantage of trading using opposite Travelers Companies and Whole Earth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Whole Earth 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 Whole Earth will offset losses from the drop in Whole Earth's long position.| Travelers Companies vs. Axa Equitable Holdings | Travelers Companies vs. American International Group | Travelers Companies vs. Arch Capital Group | Travelers Companies vs. Sun Life Financial |
| Whole Earth vs. Seneca Foods Corp | Whole Earth vs. Lifeway Foods | Whole Earth vs. John B Sanfilippo | Whole Earth vs. Real Good Food |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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