Correlation Between TRAVELERS and Dow Jones
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By analyzing existing cross correlation between TRAVELERS INS GROUP and Dow Jones Industrial, you can compare the effects of market volatilities on TRAVELERS and Dow Jones 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 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVELERS and Dow Jones.
Diversification Opportunities for TRAVELERS and Dow Jones
Very weak diversification
The 3 months correlation between TRAVELERS and Dow is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding TRAVELERS INS GROUP and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and TRAVELERS 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 TRAVELERS INS GROUP are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of TRAVELERS i.e., TRAVELERS and Dow Jones go up and down completely randomly.
Pair Corralation between TRAVELERS and Dow Jones
Assuming the 90 days trading horizon TRAVELERS is expected to generate 27.19 times less return on investment than Dow Jones. But when comparing it to its historical volatility, TRAVELERS INS GROUP is 1.24 times less risky than Dow Jones. It trades about 0.0 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,528,252 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 901,399 from holding Dow Jones Industrial or generate 25.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 56.76% |
| Values | Daily Returns |
TRAVELERS INS GROUP vs. Dow Jones Industrial
Performance |
| Timeline |
TRAVELERS and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
TRAVELERS INS GROUP
Pair trading matchups for TRAVELERS
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with TRAVELERS and Dow Jones
The main advantage of trading using opposite TRAVELERS and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVELERS position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| TRAVELERS vs. Iridium Communications | TRAVELERS vs. Mind Technology | TRAVELERS vs. Hawkins | TRAVELERS vs. Flex |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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