Correlation Between Travelers Companies and Aeye
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Aeye 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 Aeye 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 Aeye Inc, you can compare the effects of market volatilities on Travelers Companies and Aeye 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 Aeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Aeye.
Diversification Opportunities for Travelers Companies and Aeye
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Aeye is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc 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 Aeye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeye Inc has no effect on the direction of Travelers Companies i.e., Travelers Companies and Aeye go up and down completely randomly.
Pair Corralation between Travelers Companies and Aeye
Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the Aeye. But the stock apears to be less risky and, when comparing its historical volatility, The Travelers Companies is 5.12 times less risky than Aeye. The stock trades about -0.19 of its potential returns per unit of risk. The Aeye Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 121.00 in Aeye Inc on September 13, 2024 and sell it today you would lose (2.00) from holding Aeye Inc or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Aeye Inc
Performance |
| Timeline |
| The Travelers Companies |
| Aeye Inc |
Travelers Companies and Aeye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Aeye
The main advantage of trading using opposite Travelers Companies and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Aeye 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 Aeye will offset losses from the drop in Aeye's long position.| Travelers Companies vs. Chubb | Travelers Companies vs. W R Berkley | Travelers Companies vs. The Allstate | Travelers Companies vs. Markel |
| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Aeva Technologies | Aeye vs. Quantumscape 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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