Correlation Between AMERICAN and Travelers Companies
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By analyzing existing cross correlation between AMERICAN TOWER P and The Travelers Companies, you can compare the effects of market volatilities on AMERICAN and Travelers Companies 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 AMERICAN with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERICAN and Travelers Companies.
Diversification Opportunities for AMERICAN and Travelers Companies
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMERICAN and Travelers is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN TOWER P and The Travelers Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Travelers Companies and AMERICAN 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 AMERICAN TOWER P are associated (or correlated) with Travelers Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Travelers Companies has no effect on the direction of AMERICAN i.e., AMERICAN and Travelers Companies go up and down completely randomly.
Pair Corralation between AMERICAN and Travelers Companies
Assuming the 90 days trading horizon AMERICAN TOWER P is not expected to generate positive returns. However, AMERICAN TOWER P is 6.02 times less risky than Travelers Companies. It waists most of its returns potential to compensate for thr risk taken. Travelers Companies is generating about 0.09 per unit of risk. If you would invest 16,854 in The Travelers Companies on September 12, 2024 and sell it today you would earn a total of 7,911 from holding The Travelers Companies or generate 46.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.15% |
| Values | Daily Returns |
AMERICAN TOWER P vs. The Travelers Companies
Performance |
| Timeline |
| AMERICAN TOWER P |
| The Travelers Companies |
AMERICAN and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMERICAN and Travelers Companies
The main advantage of trading using opposite AMERICAN and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERICAN position performs unexpectedly, Travelers Companies 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 Travelers Companies will offset losses from the drop in Travelers Companies' long position.| AMERICAN vs. AEP TEX INC | AMERICAN vs. US BANK NATIONAL | AMERICAN vs. Applied Blockchain | AMERICAN vs. BigBearai Holdings |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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