Correlation Between Travelers Companies and CIBT Education
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and CIBT Education 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 CIBT Education 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 CIBT Education Group, you can compare the effects of market volatilities on Travelers Companies and CIBT Education 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 CIBT Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and CIBT Education.
Diversification Opportunities for Travelers Companies and CIBT Education
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Travelers and CIBT is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and CIBT Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBT Education 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 CIBT Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBT Education Group has no effect on the direction of Travelers Companies i.e., Travelers Companies and CIBT Education go up and down completely randomly.
Pair Corralation between Travelers Companies and CIBT Education
Considering the 90-day investment horizon Travelers Companies is expected to generate 339.61 times less return on investment than CIBT Education. But when comparing it to its historical volatility, The Travelers Companies is 101.31 times less risky than CIBT Education. It trades about 0.06 of its potential returns per unit of risk. CIBT Education Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5.60 in CIBT Education Group on September 2, 2024 and sell it today you would lose (4.16) from holding CIBT Education Group or give up 74.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.92% |
| Values | Daily Returns |
The Travelers Companies vs. CIBT Education Group
Performance |
| Timeline |
| The Travelers Companies |
| CIBT Education Group |
Travelers Companies and CIBT Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and CIBT Education
The main advantage of trading using opposite Travelers Companies and CIBT Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, CIBT Education 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 CIBT Education will offset losses from the drop in CIBT Education'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 |
| CIBT Education vs. ATA Creativity Global | CIBT Education vs. American Public Education | CIBT Education vs. Skillful Craftsman Education | CIBT Education vs. China Liberal Education |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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