Correlation Between Travelers Companies and Bausch
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By analyzing existing cross correlation between The Travelers Companies and Bausch Health Companies, you can compare the effects of market volatilities on Travelers Companies and Bausch 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 Bausch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Bausch.
Diversification Opportunities for Travelers Companies and Bausch
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and Bausch is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies 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 Bausch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of Travelers Companies i.e., Travelers Companies and Bausch go up and down completely randomly.
Pair Corralation between Travelers Companies and Bausch
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.65 times more return on investment than Bausch. However, The Travelers Companies is 1.54 times less risky than Bausch. It trades about 0.29 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.08 per unit of risk. If you would invest 24,281 in The Travelers Companies on September 4, 2024 and sell it today you would earn a total of 1,778 from holding The Travelers Companies or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 52.38% |
| Values | Daily Returns |
The Travelers Companies vs. Bausch Health Companies
Performance |
| Timeline |
| The Travelers Companies |
| Bausch Health Companies |
Travelers Companies and Bausch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Bausch
The main advantage of trading using opposite Travelers Companies and Bausch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Bausch 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 Bausch will offset losses from the drop in Bausch's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley | Travelers Companies vs. The Allstate |
| Bausch vs. Titan Machinery | Bausch vs. Pool Corporation | Bausch vs. Cedar Realty Trust | Bausch vs. Viemed Healthcare |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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