Correlation Between Travelers Companies and Posera
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Posera 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 Posera 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 Posera, you can compare the effects of market volatilities on Travelers Companies and Posera 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 Posera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Posera.
Diversification Opportunities for Travelers Companies and Posera
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Travelers and Posera is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Posera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posera 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 Posera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posera has no effect on the direction of Travelers Companies i.e., Travelers Companies and Posera go up and down completely randomly.
Pair Corralation between Travelers Companies and Posera
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.15 times more return on investment than Posera. However, The Travelers Companies is 6.54 times less risky than Posera. It trades about 0.08 of its potential returns per unit of risk. Posera is currently generating about -0.39 per unit of risk. If you would invest 25,642 in The Travelers Companies on August 25, 2024 and sell it today you would earn a total of 605.00 from holding The Travelers Companies or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Posera
Performance |
| Timeline |
| The Travelers Companies |
| Posera |
Travelers Companies and Posera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Posera
The main advantage of trading using opposite Travelers Companies and Posera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Posera 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 Posera will offset losses from the drop in Posera's long position.| Travelers Companies vs. Amtech Systems | Travelers Companies vs. Gold Fields Ltd | Travelers Companies vs. Aegean Airlines SA | Travelers Companies vs. Merck Company |
| Posera vs. Pampa Metals | Posera vs. Progressive Planet Solutions | Posera vs. Searchlight Resources | Posera vs. Durango Resources |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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