Correlation Between Travelers Companies and SolarBank
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and SolarBank 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 SolarBank 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 SolarBank, you can compare the effects of market volatilities on Travelers Companies and SolarBank 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 SolarBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and SolarBank.
Diversification Opportunities for Travelers Companies and SolarBank
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and SolarBank is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and SolarBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarBank 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 SolarBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarBank has no effect on the direction of Travelers Companies i.e., Travelers Companies and SolarBank go up and down completely randomly.
Pair Corralation between Travelers Companies and SolarBank
If you would invest 24,564 in The Travelers Companies on September 2, 2024 and sell it today you would earn a total of 2,040 from holding The Travelers Companies or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
The Travelers Companies vs. SolarBank
Performance |
| Timeline |
| The Travelers Companies |
| SolarBank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and SolarBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and SolarBank
The main advantage of trading using opposite Travelers Companies and SolarBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, SolarBank 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 SolarBank will offset losses from the drop in SolarBank's long position.| Travelers Companies vs. Selective Insurance Group | Travelers Companies vs. Aquagold International | Travelers Companies vs. Thrivent High Yield | Travelers Companies vs. Morningstar Unconstrained Allocation |
| SolarBank vs. Oatly Group AB | SolarBank vs. Vita Coco | SolarBank vs. Warner Music Group | SolarBank vs. Constellation Brands Class |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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