Correlation Between Bitcoin and TRAVELERS

Can any of the company-specific risk be diversified away by investing in both Bitcoin and TRAVELERS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bitcoin and TRAVELERS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitcoin and TRAVELERS INC 405, you can compare the effects of market volatilities on Bitcoin and TRAVELERS 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 Bitcoin with a short position of TRAVELERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and TRAVELERS.

Diversification Opportunities for Bitcoin and TRAVELERS

0.28

Correlation Coefficient

Bitcoin  TRAVELERS

Modest diversification

The 3 months correlation between Bitcoin and TRAVELERS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and TRAVELERS INC 405 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVELERS INC 405 and Bitcoin 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 Bitcoin are associated (or correlated) with TRAVELERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVELERS INC 405 has no effect on the direction of Bitcoin i.e., Bitcoin and TRAVELERS go up and down completely randomly.

Pair Corralation between Bitcoin and TRAVELERS

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the TRAVELERS. In addition to that, Bitcoin is 2.51 times more volatile than TRAVELERS INC 405. It trades about -0.04 of its total potential returns per unit of risk. TRAVELERS INC 405 is currently generating about 0.03 per unit of volatility. If you would invest  8,051  in TRAVELERS INC 405 on December 26, 2024 and sell it today you would earn a total of  73.00  from holding TRAVELERS INC 405 or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	52.38%
Values	Daily Returns

Bitcoin  vs.  TRAVELERS INC 405

Bitcoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Bitcoin shareholders.

TRAVELERS INC 405

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVELERS INC 405 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, TRAVELERS is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bitcoin and TRAVELERS

The main advantage of trading using opposite Bitcoin and TRAVELERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, TRAVELERS 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 will offset losses from the drop in TRAVELERS's long position.

The idea behind Bitcoin and TRAVELERS INC 405 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..