Correlation Between Travelers Companies and Shift Technologies
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Shift Technologies 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 Shift Technologies 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 Shift Technologies, you can compare the effects of market volatilities on Travelers Companies and Shift Technologies 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 Shift Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Shift Technologies.
Diversification Opportunities for Travelers Companies and Shift Technologies
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Travelers and Shift is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Shift Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shift Technologies 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 Shift Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shift Technologies has no effect on the direction of Travelers Companies i.e., Travelers Companies and Shift Technologies go up and down completely randomly.
Pair Corralation between Travelers Companies and Shift Technologies
Considering the 90-day investment horizon Travelers Companies is expected to generate 3.95 times less return on investment than Shift Technologies. But when comparing it to its historical volatility, The Travelers Companies is 6.77 times less risky than Shift Technologies. It trades about 0.06 of its potential returns per unit of risk. Shift Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 235.00 in Shift Technologies on August 28, 2024 and sell it today you would lose (22.00) from holding Shift Technologies or give up 9.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 31.45% |
| Values | Daily Returns |
The Travelers Companies vs. Shift Technologies
Performance |
| Timeline |
| The Travelers Companies |
| Shift Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Shift Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Shift Technologies
The main advantage of trading using opposite Travelers Companies and Shift Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Shift Technologies 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 Shift Technologies will offset losses from the drop in Shift Technologies' long position.| Travelers Companies vs. Fiverr International | Travelers Companies vs. Pinterest | Travelers Companies vs. Upstart Holdings | Travelers Companies vs. Fastly Inc |
| Shift Technologies vs. Carvana Co | Shift Technologies vs. CarMax Inc | Shift Technologies vs. U Power Limited | Shift Technologies vs. Vroom 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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