Correlation Between Travelers Companies and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and ProShares Ultra 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 ProShares Ultra 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 ProShares Ultra Bloomberg, you can compare the effects of market volatilities on Travelers Companies and ProShares Ultra 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 ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and ProShares Ultra.
Diversification Opportunities for Travelers Companies and ProShares Ultra
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and ProShares is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and ProShares Ultra Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Bloomberg 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 ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Bloomberg has no effect on the direction of Travelers Companies i.e., Travelers Companies and ProShares Ultra go up and down completely randomly.
Pair Corralation between Travelers Companies and ProShares Ultra
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.51 times more return on investment than ProShares Ultra. However, The Travelers Companies is 1.97 times less risky than ProShares Ultra. It trades about 0.12 of its potential returns per unit of risk. ProShares Ultra Bloomberg is currently generating about -0.03 per unit of risk. If you would invest 20,842 in The Travelers Companies on August 24, 2024 and sell it today you would earn a total of 5,239 from holding The Travelers Companies or generate 25.14% 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. ProShares Ultra Bloomberg
Performance |
| Timeline |
| The Travelers Companies |
| ProShares Ultra Bloomberg |
Travelers Companies and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and ProShares Ultra
The main advantage of trading using opposite Travelers Companies and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, ProShares Ultra 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 ProShares Ultra will offset losses from the drop in ProShares Ultra's long position.| Travelers Companies vs. Small Cap Core | Travelers Companies vs. FitLife Brands, Common | Travelers Companies vs. Mutual Of America | Travelers Companies vs. Gfl Environmental Holdings |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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