Correlation Between Travelers Companies and Hamilton Beach
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Hamilton Beach 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 Hamilton Beach 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 Hamilton Beach Brands, you can compare the effects of market volatilities on Travelers Companies and Hamilton Beach 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 Hamilton Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Hamilton Beach.
Diversification Opportunities for Travelers Companies and Hamilton Beach
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Hamilton is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Hamilton Beach Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Beach Brands 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 Hamilton Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Beach Brands has no effect on the direction of Travelers Companies i.e., Travelers Companies and Hamilton Beach go up and down completely randomly.
Pair Corralation between Travelers Companies and Hamilton Beach
Considering the 90-day investment horizon Travelers Companies is expected to generate 1.92 times less return on investment than Hamilton Beach. But when comparing it to its historical volatility, The Travelers Companies is 2.51 times less risky than Hamilton Beach. It trades about 0.06 of its potential returns per unit of risk. Hamilton Beach Brands is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,167 in Hamilton Beach Brands on August 31, 2024 and sell it today you would earn a total of 814.00 from holding Hamilton Beach Brands or generate 69.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Hamilton Beach Brands
Performance |
| Timeline |
| The Travelers Companies |
| Hamilton Beach Brands |
Travelers Companies and Hamilton Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Hamilton Beach
The main advantage of trading using opposite Travelers Companies and Hamilton Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Hamilton Beach 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 Hamilton Beach will offset losses from the drop in Hamilton Beach's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. The Allstate | Travelers Companies vs. CNA Financial |
| Hamilton Beach vs. Bassett Furniture Industries | Hamilton Beach vs. Flexsteel Industries | Hamilton Beach vs. Natuzzi SpA | Hamilton Beach vs. La Z Boy Incorporated |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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