Correlation Between Travelers Companies and CATERPILLAR
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By analyzing existing cross correlation between The Travelers Companies and CATERPILLAR INC 53, you can compare the effects of market volatilities on Travelers Companies and CATERPILLAR 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 CATERPILLAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and CATERPILLAR.
Diversification Opportunities for Travelers Companies and CATERPILLAR
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and CATERPILLAR is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and CATERPILLAR INC 53 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATERPILLAR INC 53 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 CATERPILLAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATERPILLAR INC 53 has no effect on the direction of Travelers Companies i.e., Travelers Companies and CATERPILLAR go up and down completely randomly.
Pair Corralation between Travelers Companies and CATERPILLAR
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.3 times more return on investment than CATERPILLAR. However, Travelers Companies is 1.3 times more volatile than CATERPILLAR INC 53. It trades about 0.06 of its potential returns per unit of risk. CATERPILLAR INC 53 is currently generating about 0.0 per unit of risk. If you would invest 18,034 in The Travelers Companies on September 3, 2024 and sell it today you would earn a total of 8,570 from holding The Travelers Companies or generate 47.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 56.16% |
| Values | Daily Returns |
The Travelers Companies vs. CATERPILLAR INC 53
Performance |
| Timeline |
| The Travelers Companies |
| CATERPILLAR INC 53 |
Travelers Companies and CATERPILLAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and CATERPILLAR
The main advantage of trading using opposite Travelers Companies and CATERPILLAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, CATERPILLAR 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 CATERPILLAR will offset losses from the drop in CATERPILLAR's long position.| Travelers Companies vs. SPACE | Travelers Companies vs. Ampleforth | Travelers Companies vs. ionet | Travelers Companies vs. KIN |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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