Correlation Between Travelers Companies and Reynolds
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By analyzing existing cross correlation between The Travelers Companies and Reynolds American 725, you can compare the effects of market volatilities on Travelers Companies and Reynolds 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 Reynolds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Reynolds.
Diversification Opportunities for Travelers Companies and Reynolds
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Reynolds is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Reynolds American 725 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reynolds American 725 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 Reynolds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reynolds American 725 has no effect on the direction of Travelers Companies i.e., Travelers Companies and Reynolds go up and down completely randomly.
Pair Corralation between Travelers Companies and Reynolds
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.3 times more return on investment than Reynolds. However, Travelers Companies is 1.3 times more volatile than Reynolds American 725. It trades about 0.05 of its potential returns per unit of risk. Reynolds American 725 is currently generating about -0.05 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 | Very Weak |
| Accuracy | 89.06% |
| Values | Daily Returns |
The Travelers Companies vs. Reynolds American 725
Performance |
| Timeline |
| The Travelers Companies |
| Reynolds American 725 |
Travelers Companies and Reynolds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Reynolds
The main advantage of trading using opposite Travelers Companies and Reynolds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Reynolds 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 Reynolds will offset losses from the drop in Reynolds' long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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