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 ActiveBeta, 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
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Travelers and Goldman is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Goldman Sachs ActiveBeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs ActiveBeta 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 ActiveBeta 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 The Travelers Companies is expected to generate 1.99 times more return on investment than Goldman Sachs. However, Travelers Companies is 1.99 times more volatile than Goldman Sachs ActiveBeta. It trades about -0.03 of its potential returns per unit of risk. Goldman Sachs ActiveBeta is currently generating about -0.08 per unit of risk. If you would invest 25,101 in The Travelers Companies on November 28, 2024 and sell it today you would lose (216.00) from holding The Travelers Companies or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Goldman Sachs ActiveBeta
Performance |
| Timeline |
| The Travelers Companies |
| Goldman Sachs ActiveBeta |
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. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
| Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. iShares Equity Factor | Goldman Sachs vs. Goldman Sachs ActiveBeta |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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