Correlation Between Travelers Companies and Gossamer Bio
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Gossamer Bio 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 Gossamer Bio 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 Gossamer Bio, you can compare the effects of market volatilities on Travelers Companies and Gossamer Bio 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 Gossamer Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Gossamer Bio.
Diversification Opportunities for Travelers Companies and Gossamer Bio
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Gossamer is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Gossamer Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gossamer Bio 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 Gossamer Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gossamer Bio has no effect on the direction of Travelers Companies i.e., Travelers Companies and Gossamer Bio go up and down completely randomly.
Pair Corralation between Travelers Companies and Gossamer Bio
Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the Gossamer Bio. But the stock apears to be less risky and, when comparing its historical volatility, The Travelers Companies is 3.1 times less risky than Gossamer Bio. The stock trades about -0.01 of its potential returns per unit of risk. The Gossamer Bio is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 96.00 in Gossamer Bio on November 18, 2024 and sell it today you would earn a total of 35.00 from holding Gossamer Bio or generate 36.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Gossamer Bio
Performance |
| Timeline |
| The Travelers Companies |
| Gossamer Bio |
Travelers Companies and Gossamer Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Gossamer Bio
The main advantage of trading using opposite Travelers Companies and Gossamer Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Gossamer Bio 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 Gossamer Bio will offset losses from the drop in Gossamer Bio's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
| Gossamer Bio vs. Biomea Fusion | Gossamer Bio vs. Stoke Therapeutics | Gossamer Bio vs. Akero Therapeutics | Gossamer Bio vs. Replimune Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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