Correlation Between Travelers Companies and Hinto Energy
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Hinto Energy 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 Hinto Energy 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 Hinto Energy, you can compare the effects of market volatilities on Travelers Companies and Hinto Energy 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 Hinto Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Hinto Energy.
Diversification Opportunities for Travelers Companies and Hinto Energy
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Hinto is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Hinto Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hinto Energy 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 Hinto Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hinto Energy has no effect on the direction of Travelers Companies i.e., Travelers Companies and Hinto Energy go up and down completely randomly.
Pair Corralation between Travelers Companies and Hinto Energy
Considering the 90-day investment horizon The Travelers Companies is expected to generate 6.93 times more return on investment than Hinto Energy. However, Travelers Companies is 6.93 times more volatile than Hinto Energy. It trades about 0.13 of its potential returns per unit of risk. Hinto Energy is currently generating about -0.15 per unit of risk. If you would invest 23,987 in The Travelers Companies on November 30, 2024 and sell it today you would earn a total of 1,862 from holding The Travelers Companies or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.18% |
| Values | Daily Returns |
The Travelers Companies vs. Hinto Energy
Performance |
| Timeline |
| The Travelers Companies |
| Hinto Energy |
Travelers Companies and Hinto Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Hinto Energy
The main advantage of trading using opposite Travelers Companies and Hinto Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Hinto Energy 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 Hinto Energy will offset losses from the drop in Hinto Energy's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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