Correlation Between Travelers Companies and High Arctic
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and High Arctic 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 High Arctic 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 High Arctic Energy, you can compare the effects of market volatilities on Travelers Companies and High Arctic 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 High Arctic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and High Arctic.
Diversification Opportunities for Travelers Companies and High Arctic
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and High is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and High Arctic Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Arctic 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 High Arctic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Arctic Energy has no effect on the direction of Travelers Companies i.e., Travelers Companies and High Arctic go up and down completely randomly.
Pair Corralation between Travelers Companies and High Arctic
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.59 times more return on investment than High Arctic. However, The Travelers Companies is 1.69 times less risky than High Arctic. It trades about 0.32 of its potential returns per unit of risk. High Arctic Energy is currently generating about -0.05 per unit of risk. If you would invest 24,594 in The Travelers Companies on September 1, 2024 and sell it today you would earn a total of 2,010 from holding The Travelers Companies or generate 8.17% 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. High Arctic Energy
Performance |
| Timeline |
| The Travelers Companies |
| High Arctic Energy |
Travelers Companies and High Arctic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and High Arctic
The main advantage of trading using opposite Travelers Companies and High Arctic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, High Arctic 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 High Arctic will offset losses from the drop in High Arctic'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 |
| High Arctic vs. Petroleo Brasileiro Petrobras | High Arctic vs. Equinor ASA ADR | High Arctic vs. Eni SpA ADR | High Arctic vs. YPF Sociedad Anonima |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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