Correlation Between NORTHROP and Travelers Companies
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By analyzing existing cross correlation between NORTHROP GRUMMAN P and The Travelers Companies, you can compare the effects of market volatilities on NORTHROP 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 NORTHROP with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHROP and Travelers Companies.
Diversification Opportunities for NORTHROP and Travelers Companies
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NORTHROP and Travelers is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding NORTHROP GRUMMAN 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 NORTHROP 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 NORTHROP GRUMMAN 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 NORTHROP i.e., NORTHROP and Travelers Companies go up and down completely randomly.
Pair Corralation between NORTHROP and Travelers Companies
Assuming the 90 days trading horizon NORTHROP GRUMMAN P is expected to under-perform the Travelers Companies. But the bond apears to be less risky and, when comparing its historical volatility, NORTHROP GRUMMAN P is 1.6 times less risky than Travelers Companies. The bond trades about 0.0 of its potential returns per unit of risk. The The Travelers Companies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 17,984 in The Travelers Companies on September 4, 2024 and sell it today you would earn a total of 8,075 from holding The Travelers Companies or generate 44.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.88% |
| Values | Daily Returns |
NORTHROP GRUMMAN P vs. The Travelers Companies
Performance |
| Timeline |
| NORTHROP GRUMMAN P |
| The Travelers Companies |
NORTHROP and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHROP and Travelers Companies
The main advantage of trading using opposite NORTHROP and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHROP 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.| NORTHROP vs. Transportadora de Gas | NORTHROP vs. Paysafe | NORTHROP vs. Suburban Propane Partners | NORTHROP vs. Aris Water Solutions |
| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley | Travelers Companies vs. The Allstate |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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