Correlation Between Travelers Companies and Pantheon Resources
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Pantheon 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 Pantheon 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 Pantheon Resources Plc, you can compare the effects of market volatilities on Travelers Companies and Pantheon 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 Pantheon Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Pantheon Resources.
Diversification Opportunities for Travelers Companies and Pantheon Resources
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Pantheon is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Pantheon Resources Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pantheon Resources Plc 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 Pantheon Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pantheon Resources Plc has no effect on the direction of Travelers Companies i.e., Travelers Companies and Pantheon Resources go up and down completely randomly.
Pair Corralation between Travelers Companies and Pantheon Resources
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.2 times more return on investment than Pantheon Resources. However, The Travelers Companies is 5.12 times less risky than Pantheon Resources. It trades about 0.33 of its potential returns per unit of risk. Pantheon Resources Plc is currently generating about 0.03 per unit of risk. If you would invest 24,564 in The Travelers Companies on September 2, 2024 and sell it today you would earn a total of 2,040 from holding The Travelers Companies or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Pantheon Resources Plc
Performance |
| Timeline |
| The Travelers Companies |
| Pantheon Resources Plc |
Travelers Companies and Pantheon Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Pantheon Resources
The main advantage of trading using opposite Travelers Companies and Pantheon Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Pantheon 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 Pantheon Resources will offset losses from the drop in Pantheon Resources' long position.| Travelers Companies vs. Selective Insurance Group | Travelers Companies vs. Aquagold International | Travelers Companies vs. Thrivent High Yield | Travelers Companies vs. Morningstar Unconstrained Allocation |
| Pantheon Resources vs. CGX Energy | Pantheon Resources vs. Eco Oil Gas | Pantheon Resources vs. Reconnaissance Energy Africa | Pantheon Resources vs. Sintana Energy |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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