Correlation Between Travelers Companies and Sprott Junior
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Sprott Junior 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 Sprott Junior 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 Sprott Junior Uranium, you can compare the effects of market volatilities on Travelers Companies and Sprott Junior 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 Sprott Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Sprott Junior.
Diversification Opportunities for Travelers Companies and Sprott Junior
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Sprott is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Sprott Junior Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Junior Uranium 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 Sprott Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Junior Uranium has no effect on the direction of Travelers Companies i.e., Travelers Companies and Sprott Junior go up and down completely randomly.
Pair Corralation between Travelers Companies and Sprott Junior
Considering the 90-day investment horizon Travelers Companies is expected to generate 1.06 times less return on investment than Sprott Junior. But when comparing it to its historical volatility, The Travelers Companies is 2.16 times less risky than Sprott Junior. It trades about 0.06 of its potential returns per unit of risk. Sprott Junior Uranium is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,601 in Sprott Junior Uranium on November 9, 2024 and sell it today you would earn a total of 319.00 from holding Sprott Junior Uranium or generate 19.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Sprott Junior Uranium
Performance |
| Timeline |
| The Travelers Companies |
| Sprott Junior Uranium |
Travelers Companies and Sprott Junior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Sprott Junior
The main advantage of trading using opposite Travelers Companies and Sprott Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Sprott Junior 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 Sprott Junior will offset losses from the drop in Sprott Junior's long position.| Travelers Companies vs. Great Western Minerals | Travelers Companies vs. Enterprise Bancorp | Travelers Companies vs. T Rowe Price | Travelers Companies vs. Aviat Networks |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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