Correlation Between Travelers Companies and RBB Fund
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and RBB Fund 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 RBB Fund 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 The RBB Fund, you can compare the effects of market volatilities on Travelers Companies and RBB Fund 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 RBB Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and RBB Fund.
Diversification Opportunities for Travelers Companies and RBB Fund
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Travelers and RBB is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and The RBB Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBB Fund 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 RBB Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBB Fund has no effect on the direction of Travelers Companies i.e., Travelers Companies and RBB Fund go up and down completely randomly.
Pair Corralation between Travelers Companies and RBB Fund
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.82 times more return on investment than RBB Fund. However, Travelers Companies is 1.82 times more volatile than The RBB Fund. It trades about 0.13 of its potential returns per unit of risk. The RBB Fund is currently generating about 0.22 per unit of risk. If you would invest 20,839 in The Travelers Companies on September 1, 2024 and sell it today you would earn a total of 5,765 from holding The Travelers Companies or generate 27.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. The RBB Fund
Performance |
| Timeline |
| The Travelers Companies |
| RBB Fund |
Travelers Companies and RBB Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and RBB Fund
The main advantage of trading using opposite Travelers Companies and RBB Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, RBB Fund 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 RBB Fund will offset losses from the drop in RBB Fund'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 |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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