Correlation Between Travelers Companies and Mountain Boy
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Mountain Boy 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 Mountain Boy 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 Mountain Boy Minerals, you can compare the effects of market volatilities on Travelers Companies and Mountain Boy 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 Mountain Boy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Mountain Boy.
Diversification Opportunities for Travelers Companies and Mountain Boy
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Mountain is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Mountain Boy Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Boy Minerals 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 Mountain Boy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Boy Minerals has no effect on the direction of Travelers Companies i.e., Travelers Companies and Mountain Boy go up and down completely randomly.
Pair Corralation between Travelers Companies and Mountain Boy
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.14 times more return on investment than Mountain Boy. However, The Travelers Companies is 7.1 times less risky than Mountain Boy. It trades about 0.12 of its potential returns per unit of risk. Mountain Boy Minerals is currently generating about -0.02 per unit of risk. If you would invest 15,805 in The Travelers Companies on September 3, 2024 and sell it today you would earn a total of 10,546 from holding The Travelers Companies or generate 66.73% 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. Mountain Boy Minerals
Performance |
| Timeline |
| The Travelers Companies |
| Mountain Boy Minerals |
Travelers Companies and Mountain Boy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Mountain Boy
The main advantage of trading using opposite Travelers Companies and Mountain Boy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Mountain Boy 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 Mountain Boy will offset losses from the drop in Mountain Boy's long position.| Travelers Companies vs. SPACE | Travelers Companies vs. Ampleforth | Travelers Companies vs. ionet | Travelers Companies vs. KIN |
| Mountain Boy vs. Star Royalties | Mountain Boy vs. Defiance Silver Corp | Mountain Boy vs. Diamond Fields Resources | Mountain Boy vs. GoGold Resources |
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 Stocks Directory module to find actively traded stocks across global markets.
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