Correlation Between Travelers Companies and IShares Morningstar
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and IShares Morningstar 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 IShares Morningstar 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 iShares Morningstar Growth, you can compare the effects of market volatilities on Travelers Companies and IShares Morningstar 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 IShares Morningstar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and IShares Morningstar.
Diversification Opportunities for Travelers Companies and IShares Morningstar
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Travelers and IShares is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and iShares Morningstar Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Morningstar 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 IShares Morningstar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Morningstar has no effect on the direction of Travelers Companies i.e., Travelers Companies and IShares Morningstar go up and down completely randomly.
Pair Corralation between Travelers Companies and IShares Morningstar
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.35 times more return on investment than IShares Morningstar. However, Travelers Companies is 1.35 times more volatile than iShares Morningstar Growth. It trades about 0.13 of its potential returns per unit of risk. iShares Morningstar Growth is currently generating about 0.11 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. iShares Morningstar Growth
Performance |
| Timeline |
| The Travelers Companies |
| iShares Morningstar |
Travelers Companies and IShares Morningstar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and IShares Morningstar
The main advantage of trading using opposite Travelers Companies and IShares Morningstar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, IShares Morningstar 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 IShares Morningstar will offset losses from the drop in IShares Morningstar'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 |
| IShares Morningstar vs. Vanguard Growth Index | IShares Morningstar vs. iShares Russell 1000 | IShares Morningstar vs. iShares SP 500 | IShares Morningstar vs. iShares Core SP |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |