Correlation Between Travelers Companies and FundX Aggressive
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and FundX Aggressive 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 FundX Aggressive 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 FundX Aggressive ETF, you can compare the effects of market volatilities on Travelers Companies and FundX Aggressive 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 FundX Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and FundX Aggressive.
Diversification Opportunities for Travelers Companies and FundX Aggressive
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Travelers and FundX is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and FundX Aggressive ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Aggressive ETF 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 FundX Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Aggressive ETF has no effect on the direction of Travelers Companies i.e., Travelers Companies and FundX Aggressive go up and down completely randomly.
Pair Corralation between Travelers Companies and FundX Aggressive
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.14 times more return on investment than FundX Aggressive. However, Travelers Companies is 1.14 times more volatile than FundX Aggressive ETF. It trades about 0.32 of its potential returns per unit of risk. FundX Aggressive ETF is currently generating about 0.29 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 Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Travelers Companies vs. FundX Aggressive ETF
Performance |
| Timeline |
| The Travelers Companies |
| FundX Aggressive ETF |
Travelers Companies and FundX Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and FundX Aggressive
The main advantage of trading using opposite Travelers Companies and FundX Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, FundX Aggressive 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 FundX Aggressive will offset losses from the drop in FundX Aggressive's 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 |
| FundX Aggressive vs. Vanguard Growth Index | FundX Aggressive vs. iShares Russell 1000 | FundX Aggressive vs. iShares SP 500 | FundX Aggressive vs. iShares Core SP |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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