Correlation Between Travelers Companies and Western Sierra
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Western Sierra at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Travelers Companies and Western Sierra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Travelers Companies and Western Sierra Mining, you can compare the effects of market volatilities on Travelers Companies and Western Sierra 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 Western Sierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Western Sierra.
Diversification Opportunities for Travelers Companies and Western Sierra
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Travelers and Western is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Western Sierra Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Sierra Mining 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 Western Sierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Sierra Mining has no effect on the direction of Travelers Companies i.e., Travelers Companies and Western Sierra go up and down completely randomly.
Pair Corralation between Travelers Companies and Western Sierra
Considering the 90-day investment horizon The Travelers Companies is expected to generate 2.72 times more return on investment than Western Sierra. However, Travelers Companies is 2.72 times more volatile than Western Sierra Mining. It trades about 0.24 of its potential returns per unit of risk. Western Sierra Mining is currently generating about 0.0 per unit of risk. If you would invest 25,009 in The Travelers Companies on August 31, 2024 and sell it today you would earn a total of 1,657 from holding The Travelers Companies or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Western Sierra Mining
Performance |
| Timeline |
| The Travelers Companies |
| Western Sierra Mining |
Travelers Companies and Western Sierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Western Sierra
The main advantage of trading using opposite Travelers Companies and Western Sierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Western Sierra 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 Western Sierra will offset losses from the drop in Western Sierra's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. The Allstate | Travelers Companies vs. Selective Insurance Group |
| Western Sierra vs. Green Cures Botanical | Western Sierra vs. Cann American Corp | Western Sierra vs. Rimrock Gold Corp | Western Sierra vs. Galexxy 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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