Correlation Between Travelers Companies and KRAFT
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By analyzing existing cross correlation between The Travelers Companies and KRAFT FOODS GROUP, you can compare the effects of market volatilities on Travelers Companies and KRAFT 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 KRAFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and KRAFT.
Diversification Opportunities for Travelers Companies and KRAFT
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and KRAFT is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and KRAFT FOODS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAFT FOODS GROUP 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 KRAFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAFT FOODS GROUP has no effect on the direction of Travelers Companies i.e., Travelers Companies and KRAFT go up and down completely randomly.
Pair Corralation between Travelers Companies and KRAFT
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.58 times more return on investment than KRAFT. However, Travelers Companies is 1.58 times more volatile than KRAFT FOODS GROUP. It trades about 0.05 of its potential returns per unit of risk. KRAFT FOODS GROUP is currently generating about -0.07 per unit of risk. If you would invest 23,313 in The Travelers Companies on September 12, 2024 and sell it today you would earn a total of 1,204 from holding The Travelers Companies or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.06% |
| Values | Daily Returns |
The Travelers Companies vs. KRAFT FOODS GROUP
Performance |
| Timeline |
| The Travelers Companies |
| KRAFT FOODS GROUP |
Travelers Companies and KRAFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and KRAFT
The main advantage of trading using opposite Travelers Companies and KRAFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, KRAFT 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 KRAFT will offset losses from the drop in KRAFT's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
| KRAFT vs. Church Dwight | KRAFT vs. RBC Bearings Incorporated | KRAFT vs. Meiwu Technology Co | KRAFT vs. National Vision Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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