Correlation Between Travelers Companies and FT Vest
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and FT Vest 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 FT Vest 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 FT Vest Nasdaq 100, you can compare the effects of market volatilities on Travelers Companies and FT Vest 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 FT Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and FT Vest.
Diversification Opportunities for Travelers Companies and FT Vest
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and QMNV is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and FT Vest Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Vest Nasdaq 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 FT Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Vest Nasdaq has no effect on the direction of Travelers Companies i.e., Travelers Companies and FT Vest go up and down completely randomly.
Pair Corralation between Travelers Companies and FT Vest
Considering the 90-day investment horizon The Travelers Companies is expected to generate 5.66 times more return on investment than FT Vest. However, Travelers Companies is 5.66 times more volatile than FT Vest Nasdaq 100. It trades about 0.11 of its potential returns per unit of risk. FT Vest Nasdaq 100 is currently generating about 0.5 per unit of risk. If you would invest 15,686 in The Travelers Companies on September 12, 2024 and sell it today you would earn a total of 9,079 from holding The Travelers Companies or generate 57.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.14% |
| Values | Daily Returns |
The Travelers Companies vs. FT Vest Nasdaq 100
Performance |
| Timeline |
| The Travelers Companies |
| FT Vest Nasdaq |
Travelers Companies and FT Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and FT Vest
The main advantage of trading using opposite Travelers Companies and FT Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, FT Vest 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 FT Vest will offset losses from the drop in FT Vest's long position.| Travelers Companies vs. Aeye Inc | Travelers Companies vs. Ep Emerging Markets | Travelers Companies vs. LiCycle Holdings Corp | Travelers Companies vs. SEI Investments |
| FT Vest vs. FT Vest Equity | FT Vest vs. Northern Lights | FT Vest vs. Dimensional International High | FT Vest vs. JPMorgan Fundamental Data |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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