Correlation Between Travelers Companies and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Cornish Metals 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 Cornish Metals 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 Cornish Metals, you can compare the effects of market volatilities on Travelers Companies and Cornish Metals 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 Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Cornish Metals.
Diversification Opportunities for Travelers Companies and Cornish Metals
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Cornish is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals 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 Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Travelers Companies i.e., Travelers Companies and Cornish Metals go up and down completely randomly.
Pair Corralation between Travelers Companies and Cornish Metals
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.32 times more return on investment than Cornish Metals. However, The Travelers Companies is 3.1 times less risky than Cornish Metals. It trades about 0.11 of its potential returns per unit of risk. Cornish Metals is currently generating about 0.02 per unit of risk. If you would invest 24,136 in The Travelers Companies on October 24, 2024 and sell it today you would earn a total of 691.50 from holding The Travelers Companies or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
The Travelers Companies vs. Cornish Metals
Performance |
| Timeline |
| The Travelers Companies |
| Cornish Metals |
Travelers Companies and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Cornish Metals
The main advantage of trading using opposite Travelers Companies and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Cornish Metals 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 Cornish Metals will offset losses from the drop in Cornish Metals' long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
| Cornish Metals vs. Filo Mining Corp | Cornish Metals vs. Pan Global Resources | Cornish Metals vs. Alphamin Resources Corp | Cornish Metals vs. Adriatic Metals Plc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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