Correlation Between Travelers Companies and Intl Star
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Intl Star 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 Intl Star 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 Intl Star, you can compare the effects of market volatilities on Travelers Companies and Intl Star 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 Intl Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Intl Star.
Diversification Opportunities for Travelers Companies and Intl Star
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Intl is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Intl Star in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intl Star 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 Intl Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intl Star has no effect on the direction of Travelers Companies i.e., Travelers Companies and Intl Star go up and down completely randomly.
Pair Corralation between Travelers Companies and Intl Star
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.21 times more return on investment than Intl Star. However, The Travelers Companies is 4.86 times less risky than Intl Star. It trades about 0.04 of its potential returns per unit of risk. Intl Star is currently generating about -0.03 per unit of risk. If you would invest 24,229 in The Travelers Companies on November 4, 2024 and sell it today you would earn a total of 289.00 from holding The Travelers Companies or generate 1.19% 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. Intl Star
Performance |
| Timeline |
| The Travelers Companies |
| Intl Star |
Travelers Companies and Intl Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Intl Star
The main advantage of trading using opposite Travelers Companies and Intl Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Intl Star 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 Intl Star will offset losses from the drop in Intl Star's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
| Intl Star vs. TransAKT | Intl Star vs. China Health Management | Intl Star vs. Huaizhong Health Group | Intl Star vs. Trimax Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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