Correlation Between Travelers Companies and Silicon Gaming
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Silicon Gaming 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 Silicon Gaming 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 Silicon Gaming, you can compare the effects of market volatilities on Travelers Companies and Silicon Gaming 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 Silicon Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Silicon Gaming.
Diversification Opportunities for Travelers Companies and Silicon Gaming
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Silicon is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Silicon Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Gaming 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 Silicon Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Gaming has no effect on the direction of Travelers Companies i.e., Travelers Companies and Silicon Gaming go up and down completely randomly.
Pair Corralation between Travelers Companies and Silicon Gaming
Considering the 90-day investment horizon Travelers Companies is expected to generate 37.26 times less return on investment than Silicon Gaming. But when comparing it to its historical volatility, The Travelers Companies is 40.13 times less risky than Silicon Gaming. It trades about 0.07 of its potential returns per unit of risk. Silicon Gaming is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 71.00 in Silicon Gaming on November 28, 2024 and sell it today you would lose (63.00) from holding Silicon Gaming or give up 88.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
The Travelers Companies vs. Silicon Gaming
Performance |
| Timeline |
| The Travelers Companies |
| Silicon Gaming |
Travelers Companies and Silicon Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Silicon Gaming
The main advantage of trading using opposite Travelers Companies and Silicon Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Silicon Gaming 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 Silicon Gaming will offset losses from the drop in Silicon Gaming's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
| Silicon Gaming vs. Cedar Realty Trust | Silicon Gaming vs. Wheeler Real Estate | Silicon Gaming vs. Macerich Company | Silicon Gaming vs. Simon Property Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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