Correlation Between Travelers Companies and FUNR
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and FUNR 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 FUNR 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 FUNR, you can compare the effects of market volatilities on Travelers Companies and FUNR 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 FUNR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and FUNR.
Diversification Opportunities for Travelers Companies and FUNR
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and FUNR is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and FUNR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUNR 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 FUNR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUNR has no effect on the direction of Travelers Companies i.e., Travelers Companies and FUNR go up and down completely randomly.
Pair Corralation between Travelers Companies and FUNR
Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the FUNR. But the stock apears to be less risky and, when comparing its historical volatility, The Travelers Companies is 31.48 times less risky than FUNR. The stock trades about -0.07 of its potential returns per unit of risk. The FUNR is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.01 in FUNR on November 27, 2024 and sell it today you would earn a total of 0.01 from holding FUNR or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.67% |
| Values | Daily Returns |
The Travelers Companies vs. FUNR
Performance |
| Timeline |
| The Travelers Companies |
| FUNR |
Travelers Companies and FUNR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and FUNR
The main advantage of trading using opposite Travelers Companies and FUNR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, FUNR 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 FUNR will offset losses from the drop in FUNR's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
| FUNR vs. Bowmo Inc | FUNR vs. Eco Innovation Group | FUNR vs. Profitable Develop | FUNR vs. Legends Business Grp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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