Correlation Between Travelers Companies and NSTAR
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By analyzing existing cross correlation between The Travelers Companies and NSTAR ELEC 44, you can compare the effects of market volatilities on Travelers Companies and NSTAR 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 NSTAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and NSTAR.
Diversification Opportunities for Travelers Companies and NSTAR
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and NSTAR is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and NSTAR ELEC 44 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR ELEC 44 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 NSTAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR ELEC 44 has no effect on the direction of Travelers Companies i.e., Travelers Companies and NSTAR go up and down completely randomly.
Pair Corralation between Travelers Companies and NSTAR
Considering the 90-day investment horizon Travelers Companies is expected to generate 149.54 times less return on investment than NSTAR. But when comparing it to its historical volatility, The Travelers Companies is 86.4 times less risky than NSTAR. It trades about 0.06 of its potential returns per unit of risk. NSTAR ELEC 44 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9,284 in NSTAR ELEC 44 on September 3, 2024 and sell it today you would lose (520.00) from holding NSTAR ELEC 44 or give up 5.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.08% |
| Values | Daily Returns |
The Travelers Companies vs. NSTAR ELEC 44
Performance |
| Timeline |
| The Travelers Companies |
| NSTAR ELEC 44 |
Travelers Companies and NSTAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and NSTAR
The main advantage of trading using opposite Travelers Companies and NSTAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, NSTAR 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 NSTAR will offset losses from the drop in NSTAR's long position.| Travelers Companies vs. SPACE | Travelers Companies vs. Ampleforth | Travelers Companies vs. ionet | Travelers Companies vs. KIN |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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