Correlation Between Travelers Companies and NORTHROP
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By analyzing existing cross correlation between The Travelers Companies and NORTHROP GRUMMAN P, you can compare the effects of market volatilities on Travelers Companies and NORTHROP 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 NORTHROP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and NORTHROP.
Diversification Opportunities for Travelers Companies and NORTHROP
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Travelers and NORTHROP is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and NORTHROP GRUMMAN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHROP GRUMMAN P 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 NORTHROP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHROP GRUMMAN P has no effect on the direction of Travelers Companies i.e., Travelers Companies and NORTHROP go up and down completely randomly.
Pair Corralation between Travelers Companies and NORTHROP
Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the NORTHROP. But the stock apears to be less risky and, when comparing its historical volatility, The Travelers Companies is 1.11 times less risky than NORTHROP. The stock trades about -0.15 of its potential returns per unit of risk. The NORTHROP GRUMMAN P is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 10,360 in NORTHROP GRUMMAN P on September 12, 2024 and sell it today you would earn a total of 630.00 from holding NORTHROP GRUMMAN P or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
The Travelers Companies vs. NORTHROP GRUMMAN P
Performance |
| Timeline |
| The Travelers Companies |
| NORTHROP GRUMMAN P |
Travelers Companies and NORTHROP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and NORTHROP
The main advantage of trading using opposite Travelers Companies and NORTHROP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, NORTHROP 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 NORTHROP will offset losses from the drop in NORTHROP's long position.| Travelers Companies vs. Aeye Inc | Travelers Companies vs. Ep Emerging Markets | Travelers Companies vs. LiCycle Holdings Corp | Travelers Companies vs. SEI Investments |
| NORTHROP vs. Compania Cervecerias Unidas | NORTHROP vs. Vita Coco | NORTHROP vs. Westrock Coffee | NORTHROP vs. Artisan Partners Asset |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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