Correlation Between Travelers Companies and Nationwide
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Nationwide 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 Nationwide 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 Nationwide, you can compare the effects of market volatilities on Travelers Companies and Nationwide 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 Nationwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Nationwide.
Diversification Opportunities for Travelers Companies and Nationwide
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Nationwide is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Nationwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide 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 Nationwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide has no effect on the direction of Travelers Companies i.e., Travelers Companies and Nationwide go up and down completely randomly.
Pair Corralation between Travelers Companies and Nationwide
If you would invest 17,716 in The Travelers Companies on August 26, 2024 and sell it today you would earn a total of 8,531 from holding The Travelers Companies or generate 48.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
The Travelers Companies vs. Nationwide
Performance |
| Timeline |
| The Travelers Companies |
| Nationwide |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Nationwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Nationwide
The main advantage of trading using opposite Travelers Companies and Nationwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Nationwide 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 Nationwide will offset losses from the drop in Nationwide's long position.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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