Correlation Between Travelers Companies and Xalles Holdings
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Xalles Holdings 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 Xalles Holdings 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 Xalles Holdings, you can compare the effects of market volatilities on Travelers Companies and Xalles Holdings 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 Xalles Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Xalles Holdings.
Diversification Opportunities for Travelers Companies and Xalles Holdings
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Xalles is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Xalles Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xalles Holdings 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 Xalles Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xalles Holdings has no effect on the direction of Travelers Companies i.e., Travelers Companies and Xalles Holdings go up and down completely randomly.
Pair Corralation between Travelers Companies and Xalles Holdings
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.1 times more return on investment than Xalles Holdings. However, The Travelers Companies is 10.11 times less risky than Xalles Holdings. It trades about 0.32 of its potential returns per unit of risk. Xalles Holdings is currently generating about -0.12 per unit of risk. If you would invest 24,594 in The Travelers Companies on September 1, 2024 and sell it today you would earn a total of 2,010 from holding The Travelers Companies or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Travelers Companies vs. Xalles Holdings
Performance |
| Timeline |
| The Travelers Companies |
| Xalles Holdings |
Travelers Companies and Xalles Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Xalles Holdings
The main advantage of trading using opposite Travelers Companies and Xalles Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Xalles Holdings 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 Xalles Holdings will offset losses from the drop in Xalles Holdings' long position.| Travelers Companies vs. Selective Insurance Group | Travelers Companies vs. Aquagold International | Travelers Companies vs. Thrivent High Yield | Travelers Companies vs. Morningstar Unconstrained Allocation |
| Xalles Holdings vs. The Travelers Companies | Xalles Holdings vs. Walt Disney | Xalles Holdings vs. Home Depot | Xalles Holdings vs. Procter Gamble |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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