Correlation Between Travelers Companies and Gotham Short
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Gotham Short 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 Gotham Short 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 Gotham Short Strategies, you can compare the effects of market volatilities on Travelers Companies and Gotham Short 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 Gotham Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Gotham Short.
Diversification Opportunities for Travelers Companies and Gotham Short
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Gotham is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Gotham Short Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Short Strategies 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 Gotham Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Short Strategies has no effect on the direction of Travelers Companies i.e., Travelers Companies and Gotham Short go up and down completely randomly.
Pair Corralation between Travelers Companies and Gotham Short
Considering the 90-day investment horizon The Travelers Companies is expected to generate 2.39 times more return on investment than Gotham Short. However, Travelers Companies is 2.39 times more volatile than Gotham Short Strategies. It trades about 0.1 of its potential returns per unit of risk. Gotham Short Strategies is currently generating about -0.12 per unit of risk. If you would invest 17,036 in The Travelers Companies on September 2, 2024 and sell it today you would earn a total of 9,568 from holding The Travelers Companies or generate 56.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.06% |
| Values | Daily Returns |
The Travelers Companies vs. Gotham Short Strategies
Performance |
| Timeline |
| The Travelers Companies |
| Gotham Short Strategies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Gotham Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Gotham Short
The main advantage of trading using opposite Travelers Companies and Gotham Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Gotham Short 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 Gotham Short will offset losses from the drop in Gotham Short's long position.| Travelers Companies vs. Selective Insurance Group | Travelers Companies vs. Aquagold International | Travelers Companies vs. Thrivent High Yield | Travelers Companies vs. Morningstar Unconstrained Allocation |
| Gotham Short vs. Deutsche Health And | Gotham Short vs. Delaware Healthcare Fund | Gotham Short vs. The Gabelli Healthcare | Gotham Short vs. Tekla Healthcare Opportunities |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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