Correlation Between Travelers Companies and Keweenaw Land
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Keweenaw Land 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 Keweenaw Land 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 Keweenaw Land Association, you can compare the effects of market volatilities on Travelers Companies and Keweenaw Land 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 Keweenaw Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Keweenaw Land.
Diversification Opportunities for Travelers Companies and Keweenaw Land
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Keweenaw is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Keweenaw Land Association in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keweenaw Land Association 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 Keweenaw Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keweenaw Land Association has no effect on the direction of Travelers Companies i.e., Travelers Companies and Keweenaw Land go up and down completely randomly.
Pair Corralation between Travelers Companies and Keweenaw Land
Considering the 90-day investment horizon Travelers Companies is expected to generate 1.14 times less return on investment than Keweenaw Land. But when comparing it to its historical volatility, The Travelers Companies is 2.99 times less risky than Keweenaw Land. It trades about 0.11 of its potential returns per unit of risk. Keweenaw Land Association is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,595 in Keweenaw Land Association on August 29, 2024 and sell it today you would earn a total of 905.00 from holding Keweenaw Land Association or generate 34.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Keweenaw Land Association
Performance |
| Timeline |
| The Travelers Companies |
| Keweenaw Land Association |
Travelers Companies and Keweenaw Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Keweenaw Land
The main advantage of trading using opposite Travelers Companies and Keweenaw Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Keweenaw Land 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 Keweenaw Land will offset losses from the drop in Keweenaw Land's long position.| Travelers Companies vs. Argo Group International | Travelers Companies vs. Donegal Group A | Travelers Companies vs. Selective Insurance Group |
| Keweenaw Land vs. Anglo American plc | Keweenaw Land vs. Glencore PLC ADR | Keweenaw Land vs. Fortescue Metals Group | Keweenaw Land vs. South32 Limited |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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