Correlation Between Travelers Companies and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Firan Technology 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 Firan Technology 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 Firan Technology Group, you can compare the effects of market volatilities on Travelers Companies and Firan Technology 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 Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Firan Technology.
Diversification Opportunities for Travelers Companies and Firan Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Firan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of Travelers Companies i.e., Travelers Companies and Firan Technology go up and down completely randomly.
Pair Corralation between Travelers Companies and Firan Technology
Considering the 90-day investment horizon Travelers Companies is expected to generate 2.35 times less return on investment than Firan Technology. But when comparing it to its historical volatility, The Travelers Companies is 2.26 times less risky than Firan Technology. It trades about 0.09 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 219.00 in Firan Technology Group on August 26, 2024 and sell it today you would earn a total of 315.00 from holding Firan Technology Group or generate 143.84% 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. Firan Technology Group
Performance |
| Timeline |
| The Travelers Companies |
| Firan Technology |
Travelers Companies and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Firan Technology
The main advantage of trading using opposite Travelers Companies and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
| Firan Technology vs. 808 Renewable Energy | Firan Technology vs. Austal Limited | Firan Technology vs. Sky Harbour Group | Firan Technology vs. CPI Aerostructures |
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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