Correlation Between Travelers Companies and Northern Graphite
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Northern Graphite 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 Northern Graphite 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 Northern Graphite, you can compare the effects of market volatilities on Travelers Companies and Northern Graphite 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 Northern Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Northern Graphite.
Diversification Opportunities for Travelers Companies and Northern Graphite
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Travelers and Northern is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Northern Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Graphite 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 Northern Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Graphite has no effect on the direction of Travelers Companies i.e., Travelers Companies and Northern Graphite go up and down completely randomly.
Pair Corralation between Travelers Companies and Northern Graphite
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.23 times more return on investment than Northern Graphite. However, The Travelers Companies is 4.26 times less risky than Northern Graphite. It trades about 0.07 of its potential returns per unit of risk. Northern Graphite is currently generating about -0.1 per unit of risk. If you would invest 24,277 in The Travelers Companies on November 9, 2024 and sell it today you would earn a total of 487.00 from holding The Travelers Companies or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Northern Graphite
Performance |
| Timeline |
| The Travelers Companies |
| Northern Graphite |
Travelers Companies and Northern Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Northern Graphite
The main advantage of trading using opposite Travelers Companies and Northern Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Northern Graphite 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 Northern Graphite will offset losses from the drop in Northern Graphite's long position.| Travelers Companies vs. Great Western Minerals | Travelers Companies vs. Enterprise Bancorp | Travelers Companies vs. T Rowe Price | Travelers Companies vs. Aviat Networks |
| Northern Graphite vs. Focus Graphite | Northern Graphite vs. Mason Graphite | Northern Graphite vs. Graphite One | Northern Graphite vs. Syrah Resources Limited |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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