Correlation Between SIMON and Travelers Companies
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By analyzing existing cross correlation between SIMON PROPERTY GROUP and The Travelers Companies, you can compare the effects of market volatilities on SIMON 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 SIMON with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMON and Travelers Companies.
Diversification Opportunities for SIMON and Travelers Companies
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SIMON and Travelers is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding SIMON PROPERTY GROUP 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 SIMON 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 SIMON PROPERTY GROUP 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 SIMON i.e., SIMON and Travelers Companies go up and down completely randomly.
Pair Corralation between SIMON and Travelers Companies
Assuming the 90 days trading horizon SIMON is expected to generate 3.35 times less return on investment than Travelers Companies. But when comparing it to its historical volatility, SIMON PROPERTY GROUP is 1.2 times less risky than Travelers Companies. It trades about 0.12 of its potential returns per unit of risk. The Travelers Companies is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 24,281 in The Travelers Companies on September 4, 2024 and sell it today you would earn a total of 2,070 from holding The Travelers Companies or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
SIMON PROPERTY GROUP vs. The Travelers Companies
Performance |
| Timeline |
| SIMON PROPERTY GROUP |
| The Travelers Companies |
SIMON and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMON and Travelers Companies
The main advantage of trading using opposite SIMON and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMON 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 SIMON PROPERTY GROUP 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. 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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