Correlation Between Travelers Companies and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Community, you can compare the effects of market volatilities on Travelers Companies and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Goldman Sachs.
Diversification Opportunities for Travelers Companies and Goldman Sachs
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Goldman is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Goldman Sachs Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Community 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Community has no effect on the direction of Travelers Companies i.e., Travelers Companies and Goldman Sachs go up and down completely randomly.
Pair Corralation between Travelers Companies and Goldman Sachs
Considering the 90-day investment horizon Travelers Companies is expected to generate 10.4 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, The Travelers Companies is 13.71 times less risky than Goldman Sachs. It trades about 0.06 of its potential returns per unit of risk. Goldman Sachs Community is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in Goldman Sachs Community on August 29, 2024 and sell it today you would earn a total of 3,989 from holding Goldman Sachs Community or generate 398.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.1% |
| Values | Daily Returns |
The Travelers Companies vs. Goldman Sachs Community
Performance |
| Timeline |
| The Travelers Companies |
| Goldman Sachs Community |
Travelers Companies and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Goldman Sachs
The main advantage of trading using opposite Travelers Companies and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Travelers Companies vs. Argo Group International | Travelers Companies vs. Donegal Group A | Travelers Companies vs. Selective Insurance Group |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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