Correlation Between Travelers Companies and Newport Exploration
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Newport Exploration 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 Newport Exploration 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 Newport Exploration, you can compare the effects of market volatilities on Travelers Companies and Newport Exploration 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 Newport Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Newport Exploration.
Diversification Opportunities for Travelers Companies and Newport Exploration
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Newport is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Newport Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newport Exploration 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 Newport Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newport Exploration has no effect on the direction of Travelers Companies i.e., Travelers Companies and Newport Exploration go up and down completely randomly.
Pair Corralation between Travelers Companies and Newport Exploration
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.25 times more return on investment than Newport Exploration. However, The Travelers Companies is 4.0 times less risky than Newport Exploration. It trades about 0.34 of its potential returns per unit of risk. Newport Exploration is currently generating about -0.09 per unit of risk. If you would invest 24,281 in The Travelers Companies on September 4, 2024 and sell it today you would earn a total of 2,070 from holding The Travelers Companies or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Newport Exploration
Performance |
| Timeline |
| The Travelers Companies |
| Newport Exploration |
Travelers Companies and Newport Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Newport Exploration
The main advantage of trading using opposite Travelers Companies and Newport Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Newport Exploration 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 Newport Exploration will offset losses from the drop in Newport Exploration's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley | Travelers Companies vs. The Allstate |
| Newport Exploration vs. Traction Uranium Corp | Newport Exploration vs. New Age Metals | Newport Exploration vs. York Harbour Metals | Newport Exploration vs. Silver Elephant Mining |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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