Correlation Between Travelers Companies and Invesco DB
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Invesco DB 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 Invesco DB 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 Invesco DB Dollar, you can compare the effects of market volatilities on Travelers Companies and Invesco DB 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 Invesco DB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Invesco DB.
Diversification Opportunities for Travelers Companies and Invesco DB
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Travelers and Invesco is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Invesco DB Dollar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco DB Dollar 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 Invesco DB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco DB Dollar has no effect on the direction of Travelers Companies i.e., Travelers Companies and Invesco DB go up and down completely randomly.
Pair Corralation between Travelers Companies and Invesco DB
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.93 times more return on investment than Invesco DB. However, Travelers Companies is 1.93 times more volatile than Invesco DB Dollar. It trades about 0.26 of its potential returns per unit of risk. Invesco DB Dollar is currently generating about -0.09 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Invesco DB Dollar
Performance |
| Timeline |
| The Travelers Companies |
| Invesco DB Dollar |
Travelers Companies and Invesco DB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Invesco DB
The main advantage of trading using opposite Travelers Companies and Invesco DB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Invesco DB 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 Invesco DB will offset losses from the drop in Invesco DB'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 |
| Invesco DB vs. Invesco DB Dollar | Invesco DB vs. Invesco CurrencyShares Australian | Invesco DB vs. Invesco CurrencyShares Japanese | Invesco DB vs. Invesco CurrencyShares Canadian |
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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