Correlation Between Travelers Companies and Gores Holdings
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Gores Holdings 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 Gores Holdings 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 Gores Holdings IX, you can compare the effects of market volatilities on Travelers Companies and Gores Holdings 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 Gores Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Gores Holdings.
Diversification Opportunities for Travelers Companies and Gores Holdings
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Gores is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Gores Holdings IX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gores Holdings IX 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 Gores Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gores Holdings IX has no effect on the direction of Travelers Companies i.e., Travelers Companies and Gores Holdings go up and down completely randomly.
Pair Corralation between Travelers Companies and Gores Holdings
Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the Gores Holdings. But the stock apears to be less risky and, when comparing its historical volatility, The Travelers Companies is 42.64 times less risky than Gores Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The Gores Holdings IX is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.70 in Gores Holdings IX on November 3, 2024 and sell it today you would lose (0.20) from holding Gores Holdings IX or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 9.76% |
| Values | Daily Returns |
The Travelers Companies vs. Gores Holdings IX
Performance |
| Timeline |
| The Travelers Companies |
| Gores Holdings IX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Travelers Companies and Gores Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Gores Holdings
The main advantage of trading using opposite Travelers Companies and Gores Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Gores Holdings 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 Gores Holdings will offset losses from the drop in Gores Holdings' long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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