Correlation Between Travelers Companies and Seelos Therapeutics
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Seelos Therapeutics 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 Seelos Therapeutics 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 Seelos Therapeutics, you can compare the effects of market volatilities on Travelers Companies and Seelos Therapeutics 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 Seelos Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Seelos Therapeutics.
Diversification Opportunities for Travelers Companies and Seelos Therapeutics
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Travelers and Seelos is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Seelos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seelos Therapeutics 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 Seelos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seelos Therapeutics has no effect on the direction of Travelers Companies i.e., Travelers Companies and Seelos Therapeutics go up and down completely randomly.
Pair Corralation between Travelers Companies and Seelos Therapeutics
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.14 times more return on investment than Seelos Therapeutics. However, The Travelers Companies is 7.2 times less risky than Seelos Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Seelos Therapeutics is currently generating about -0.22 per unit of risk. If you would invest 21,883 in The Travelers Companies on August 25, 2024 and sell it today you would earn a total of 4,364 from holding The Travelers Companies or generate 19.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.89% |
| Values | Daily Returns |
The Travelers Companies vs. Seelos Therapeutics
Performance |
| Timeline |
| The Travelers Companies |
| Seelos Therapeutics |
Travelers Companies and Seelos Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Seelos Therapeutics
The main advantage of trading using opposite Travelers Companies and Seelos Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Seelos Therapeutics 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 Seelos Therapeutics will offset losses from the drop in Seelos Therapeutics' long position.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
| Seelos Therapeutics vs. ATAI Life Sciences | Seelos Therapeutics vs. Mind Medicine | Seelos Therapeutics vs. GH Research PLC | Seelos Therapeutics vs. Cybin Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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