Correlation Between Travelers Companies and Amg Chicago
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Amg Chicago 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 Amg Chicago 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 Amg Chicago Equity, you can compare the effects of market volatilities on Travelers Companies and Amg Chicago 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 Amg Chicago. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Amg Chicago.
Diversification Opportunities for Travelers Companies and Amg Chicago
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Amg is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Amg Chicago Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Chicago Equity 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 Amg Chicago. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Chicago Equity has no effect on the direction of Travelers Companies i.e., Travelers Companies and Amg Chicago go up and down completely randomly.
Pair Corralation between Travelers Companies and Amg Chicago
Considering the 90-day investment horizon The Travelers Companies is expected to generate 2.41 times more return on investment than Amg Chicago. However, Travelers Companies is 2.41 times more volatile than Amg Chicago Equity. It trades about 0.06 of its potential returns per unit of risk. Amg Chicago Equity is currently generating about 0.07 per unit of risk. If you would invest 18,692 in The Travelers Companies on August 28, 2024 and sell it today you would earn a total of 7,430 from holding The Travelers Companies or generate 39.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.78% |
| Values | Daily Returns |
The Travelers Companies vs. Amg Chicago Equity
Performance |
| Timeline |
| The Travelers Companies |
| Amg Chicago Equity |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Amg Chicago Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Amg Chicago
The main advantage of trading using opposite Travelers Companies and Amg Chicago positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Amg Chicago 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 Amg Chicago will offset losses from the drop in Amg Chicago's long position.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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