Correlation Between Travelers Companies and Lattice Strategies
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Lattice Strategies 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 Lattice Strategies 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 Lattice Strategies Trust, you can compare the effects of market volatilities on Travelers Companies and Lattice Strategies 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 Lattice Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Lattice Strategies.
Diversification Opportunities for Travelers Companies and Lattice Strategies
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Travelers and Lattice is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Lattice Strategies Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lattice Strategies Trust 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 Lattice Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lattice Strategies Trust has no effect on the direction of Travelers Companies i.e., Travelers Companies and Lattice Strategies go up and down completely randomly.
Pair Corralation between Travelers Companies and Lattice Strategies
Considering the 90-day investment horizon The Travelers Companies is expected to generate 2.12 times more return on investment than Lattice Strategies. However, Travelers Companies is 2.12 times more volatile than Lattice Strategies Trust. It trades about 0.13 of its potential returns per unit of risk. Lattice Strategies Trust is currently generating about 0.16 per unit of risk. If you would invest 20,839 in The Travelers Companies on September 1, 2024 and sell it today you would earn a total of 5,765 from holding The Travelers Companies or generate 27.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
The Travelers Companies vs. Lattice Strategies Trust
Performance |
| Timeline |
| The Travelers Companies |
| Lattice Strategies Trust |
Travelers Companies and Lattice Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Lattice Strategies
The main advantage of trading using opposite Travelers Companies and Lattice Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Lattice Strategies 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 Lattice Strategies will offset losses from the drop in Lattice Strategies' 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 |
| Lattice Strategies vs. FT Vest Equity | Lattice Strategies vs. Northern Lights | Lattice Strategies vs. Dimensional International High | Lattice Strategies vs. Matthews China Discovery |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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