Correlation Between Travelers Companies and Pardee Resources
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Pardee Resources 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 Pardee Resources 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 Pardee Resources Co, you can compare the effects of market volatilities on Travelers Companies and Pardee Resources 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 Pardee Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Pardee Resources.
Diversification Opportunities for Travelers Companies and Pardee Resources
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Pardee is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Pardee Resources Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pardee Resources 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 Pardee Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pardee Resources has no effect on the direction of Travelers Companies i.e., Travelers Companies and Pardee Resources go up and down completely randomly.
Pair Corralation between Travelers Companies and Pardee Resources
Considering the 90-day investment horizon The Travelers Companies is expected to generate 2.2 times more return on investment than Pardee Resources. However, Travelers Companies is 2.2 times more volatile than Pardee Resources Co. It trades about 0.15 of its potential returns per unit of risk. Pardee Resources Co is currently generating about 0.06 per unit of risk. If you would invest 23,412 in The Travelers Companies on August 29, 2024 and sell it today you would earn a total of 2,965 from holding The Travelers Companies or generate 12.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
The Travelers Companies vs. Pardee Resources Co
Performance |
| Timeline |
| The Travelers Companies |
| Pardee Resources |
Travelers Companies and Pardee Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Pardee Resources
The main advantage of trading using opposite Travelers Companies and Pardee Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Pardee Resources 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 Pardee Resources will offset losses from the drop in Pardee Resources' long position.| Travelers Companies vs. Argo Group International | Travelers Companies vs. Donegal Group A | Travelers Companies vs. Selective Insurance Group |
| Pardee Resources vs. Expro Group Holdings | Pardee Resources vs. ChampionX | Pardee Resources vs. Ranger Energy Services | Pardee Resources vs. Cactus 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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