Correlation Between KROGER and Travelers Companies
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By analyzing existing cross correlation between KROGER 37 percent and The Travelers Companies, you can compare the effects of market volatilities on KROGER 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 KROGER with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of KROGER and Travelers Companies.
Diversification Opportunities for KROGER and Travelers Companies
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KROGER and Travelers is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding KROGER 37 percent 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 KROGER 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 KROGER 37 percent 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 KROGER i.e., KROGER and Travelers Companies go up and down completely randomly.
Pair Corralation between KROGER and Travelers Companies
Assuming the 90 days trading horizon KROGER 37 percent is expected to under-perform the Travelers Companies. But the bond apears to be less risky and, when comparing its historical volatility, KROGER 37 percent is 1.14 times less risky than Travelers Companies. The bond trades about -0.2 of its potential returns per unit of risk. The The Travelers Companies is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 24,281 in The Travelers Companies on September 5, 2024 and sell it today you would earn a total of 1,778 from holding The Travelers Companies or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
KROGER 37 percent vs. The Travelers Companies
Performance |
| Timeline |
| KROGER 37 percent |
| The Travelers Companies |
KROGER and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KROGER and Travelers Companies
The main advantage of trading using opposite KROGER and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KROGER 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.The idea behind KROGER 37 percent and The Travelers Companies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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