Correlation Between Travelers Companies and American
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By analyzing existing cross correlation between The Travelers Companies and American Axle Manufacturing, you can compare the effects of market volatilities on Travelers Companies and American 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 American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and American.
Diversification Opportunities for Travelers Companies and American
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and American is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and American Axle Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Axle Manufa 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 American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Axle Manufa has no effect on the direction of Travelers Companies i.e., Travelers Companies and American go up and down completely randomly.
Pair Corralation between Travelers Companies and American
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.72 times more return on investment than American. However, Travelers Companies is 1.72 times more volatile than American Axle Manufacturing. It trades about 0.11 of its potential returns per unit of risk. American Axle Manufacturing is currently generating about -0.01 per unit of risk. If you would invest 17,984 in The Travelers Companies on September 4, 2024 and sell it today you would earn a total of 8,075 from holding The Travelers Companies or generate 44.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.98% |
| Values | Daily Returns |
The Travelers Companies vs. American Axle Manufacturing
Performance |
| Timeline |
| The Travelers Companies |
| American Axle Manufa |
Travelers Companies and American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and American
The main advantage of trading using opposite Travelers Companies and American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, American 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 American will offset losses from the drop in American's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley | Travelers Companies vs. The Allstate |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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