Correlation Between Travelers Companies and SwissCom
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and SwissCom 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 SwissCom 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 SwissCom AG, you can compare the effects of market volatilities on Travelers Companies and SwissCom 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 SwissCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and SwissCom.
Diversification Opportunities for Travelers Companies and SwissCom
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and SwissCom is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and SwissCom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SwissCom AG 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 SwissCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SwissCom AG has no effect on the direction of Travelers Companies i.e., Travelers Companies and SwissCom go up and down completely randomly.
Pair Corralation between Travelers Companies and SwissCom
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.55 times more return on investment than SwissCom. However, Travelers Companies is 1.55 times more volatile than SwissCom AG. It trades about 0.15 of its potential returns per unit of risk. SwissCom AG is currently generating about -0.12 per unit of risk. If you would invest 22,534 in The Travelers Companies on August 29, 2024 and sell it today you would earn a total of 3,843 from holding The Travelers Companies or generate 17.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
The Travelers Companies vs. SwissCom AG
Performance |
| Timeline |
| The Travelers Companies |
| SwissCom AG |
Travelers Companies and SwissCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and SwissCom
The main advantage of trading using opposite Travelers Companies and SwissCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, SwissCom 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 SwissCom will offset losses from the drop in SwissCom's long position.| Travelers Companies vs. Argo Group International | Travelers Companies vs. Selective Insurance Group | Travelers Companies vs. NI Holdings | Travelers Companies vs. Donegal Group A |
| SwissCom vs. Bank Rakyat | SwissCom vs. PT Bank Rakyat | SwissCom vs. Samsung Electronics Co | SwissCom vs. Bank Mandiri Persero |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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