Correlation Between Travelers Companies and OptiNose
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and OptiNose 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 OptiNose 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 OptiNose, you can compare the effects of market volatilities on Travelers Companies and OptiNose 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 OptiNose. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and OptiNose.
Diversification Opportunities for Travelers Companies and OptiNose
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Travelers and OptiNose is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose 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 OptiNose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiNose has no effect on the direction of Travelers Companies i.e., Travelers Companies and OptiNose go up and down completely randomly.
Pair Corralation between Travelers Companies and OptiNose
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.29 times more return on investment than OptiNose. However, The Travelers Companies is 3.47 times less risky than OptiNose. It trades about 0.06 of its potential returns per unit of risk. OptiNose is currently generating about -0.04 per unit of risk. If you would invest 16,956 in The Travelers Companies on November 29, 2024 and sell it today you would earn a total of 7,929 from holding The Travelers Companies or generate 46.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. OptiNose
Performance |
| Timeline |
| The Travelers Companies |
| OptiNose |
Travelers Companies and OptiNose Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and OptiNose
The main advantage of trading using opposite Travelers Companies and OptiNose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, OptiNose 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 OptiNose will offset losses from the drop in OptiNose's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
| OptiNose vs. Collegium Pharmaceutical | OptiNose vs. Phibro Animal Health | OptiNose vs. ANI Pharmaceuticals | OptiNose vs. Procaps Group SA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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