Correlation Between Travelers Companies and THC Biomed
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and THC Biomed 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 THC Biomed 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 THC Biomed Intl, you can compare the effects of market volatilities on Travelers Companies and THC Biomed 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 THC Biomed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and THC Biomed.
Diversification Opportunities for Travelers Companies and THC Biomed
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and THC is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and THC Biomed Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THC Biomed Intl 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 THC Biomed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THC Biomed Intl has no effect on the direction of Travelers Companies i.e., Travelers Companies and THC Biomed go up and down completely randomly.
Pair Corralation between Travelers Companies and THC Biomed
If you would invest 25,237 in The Travelers Companies on August 29, 2024 and sell it today you would earn a total of 1,456 from holding The Travelers Companies or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Travelers Companies vs. THC Biomed Intl
Performance |
| Timeline |
| The Travelers Companies |
| THC Biomed Intl |
Travelers Companies and THC Biomed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and THC Biomed
The main advantage of trading using opposite Travelers Companies and THC Biomed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, THC Biomed 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 THC Biomed will offset losses from the drop in THC Biomed's long position.| Travelers Companies vs. Argo Group International | Travelers Companies vs. Donegal Group A | Travelers Companies vs. Selective Insurance Group |
| THC Biomed vs. Speakeasy Cannabis Club | THC Biomed vs. City View Green | THC Biomed vs. Benchmark Botanics | THC Biomed vs. Ravenquest Biomed |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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