Correlation Between Travelers Companies and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio Corporate, you can compare the effects of market volatilities on Travelers Companies and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and SPDR Portfolio.
Diversification Opportunities for Travelers Companies and SPDR Portfolio
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and SPDR is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and SPDR Portfolio Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Corporate 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Corporate has no effect on the direction of Travelers Companies i.e., Travelers Companies and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Travelers Companies and SPDR Portfolio
Considering the 90-day investment horizon The Travelers Companies is expected to generate 2.73 times more return on investment than SPDR Portfolio. However, Travelers Companies is 2.73 times more volatile than SPDR Portfolio Corporate. It trades about 0.26 of its potential returns per unit of risk. SPDR Portfolio Corporate is currently generating about 0.08 per unit of risk. If you would invest 24,867 in The Travelers Companies on August 30, 2024 and sell it today you would earn a total of 1,799 from holding The Travelers Companies or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. SPDR Portfolio Corporate
Performance |
| Timeline |
| The Travelers Companies |
| SPDR Portfolio Corporate |
Travelers Companies and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and SPDR Portfolio
The main advantage of trading using opposite Travelers Companies and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| Travelers Companies vs. Axa Equitable Holdings | Travelers Companies vs. American International Group | Travelers Companies vs. Arch Capital Group | Travelers Companies vs. Sun Life Financial |
| SPDR Portfolio vs. SPDR Barclays Intermediate | SPDR Portfolio vs. SPDR Portfolio Intermediate | SPDR Portfolio vs. SPDR Portfolio Mortgage | SPDR Portfolio vs. SPDR Barclays Long |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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