Correlation Between Travelers Companies and Home Capital
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Home Capital 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 Home Capital 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 Home Capital Group, you can compare the effects of market volatilities on Travelers Companies and Home Capital 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 Home Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Home Capital.
Diversification Opportunities for Travelers Companies and Home Capital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Home is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Home Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Capital Group 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 Home Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Capital Group has no effect on the direction of Travelers Companies i.e., Travelers Companies and Home Capital go up and down completely randomly.
Pair Corralation between Travelers Companies and Home Capital
If you would invest 25,050 in The Travelers Companies on August 26, 2024 and sell it today you would earn a total of 1,197 from holding The Travelers Companies or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
The Travelers Companies vs. Home Capital Group
Performance |
| Timeline |
| The Travelers Companies |
| Home Capital Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Home Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Home Capital
The main advantage of trading using opposite Travelers Companies and Home Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Home Capital 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 Home Capital will offset losses from the drop in Home Capital's long position.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
| Home Capital vs. Guild Holdings Co | Home Capital vs. Rocket Companies | Home Capital vs. UWM Holdings Corp | Home Capital vs. Mr Cooper Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |