Correlation Between Travelers Companies and Trek Resources
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Trek Resources 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 Trek Resources 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 Trek Resources, you can compare the effects of market volatilities on Travelers Companies and Trek Resources 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 Trek Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Trek Resources.
Diversification Opportunities for Travelers Companies and Trek Resources
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Travelers and Trek is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Trek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trek Resources 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 Trek Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trek Resources has no effect on the direction of Travelers Companies i.e., Travelers Companies and Trek Resources go up and down completely randomly.
Pair Corralation between Travelers Companies and Trek Resources
If you would invest 24,281 in The Travelers Companies on September 3, 2024 and sell it today you would earn a total of 2,323 from holding The Travelers Companies or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Trek Resources
Performance |
| Timeline |
| The Travelers Companies |
| Trek Resources |
Travelers Companies and Trek Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Trek Resources
The main advantage of trading using opposite Travelers Companies and Trek Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Trek Resources 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 Trek Resources will offset losses from the drop in Trek Resources' long position.| Travelers Companies vs. SPACE | Travelers Companies vs. Ampleforth | Travelers Companies vs. ionet | Travelers Companies vs. KIN |
| Trek Resources vs. CNX Resources Corp | Trek Resources vs. MV Oil Trust | Trek Resources vs. San Juan Basin | Trek Resources vs. VOC Energy Trust |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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