Correlation Between Travelers Companies and Global X
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Global X 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 Global X 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 Global X MLP, you can compare the effects of market volatilities on Travelers Companies and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Global X.
Diversification Opportunities for Travelers Companies and Global X
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Global is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Global X MLP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MLP 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MLP has no effect on the direction of Travelers Companies i.e., Travelers Companies and Global X go up and down completely randomly.
Pair Corralation between Travelers Companies and Global X
Considering the 90-day investment horizon Travelers Companies is expected to generate 8.32 times less return on investment than Global X. In addition to that, Travelers Companies is 1.28 times more volatile than Global X MLP. It trades about 0.05 of its total potential returns per unit of risk. Global X MLP is currently generating about 0.53 per unit of volatility. If you would invest 5,645 in Global X MLP on August 24, 2024 and sell it today you would earn a total of 756.00 from holding Global X MLP or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Global X MLP
Performance |
| Timeline |
| The Travelers Companies |
| Global X MLP |
Travelers Companies and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Global X
The main advantage of trading using opposite Travelers Companies and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Travelers Companies vs. Amtech Systems | Travelers Companies vs. Gold Fields Ltd | Travelers Companies vs. Aegean Airlines SA | Travelers Companies vs. Merck Company |
| Global X vs. Global X MLP | Global X vs. Alerian Energy Infrastructure | Global X vs. First Trust North | Global X vs. Tortoise North American |
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 CEOs Directory module to screen CEOs from public companies around the world.
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