Correlation Between Travelers Companies and G Collado

Can any of the company-specific risk be diversified away by investing in both Travelers Companies and G Collado 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 Travelers Companies and G Collado into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Travelers Companies and G Collado SAB, you can compare the effects of market volatilities on Travelers Companies and G Collado 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 Companies with a short position of G Collado. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and G Collado.

Diversification Opportunities for Travelers Companies and G Collado

0.68

Correlation Coefficient

Travelers Companies  G Collado

Poor diversification

The 3 months correlation between Travelers and COLLADO is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and G Collado SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Collado SAB and Travelers Companies 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 The Travelers Companies are associated (or correlated) with G Collado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Collado SAB has no effect on the direction of Travelers Companies i.e., Travelers Companies and G Collado go up and down completely randomly.

Pair Corralation between Travelers Companies and G Collado

If you would invest  518,887  in The Travelers Companies on September 24, 2024 and sell it today you would earn a total of  6,362  from holding The Travelers Companies or generate 1.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

The Travelers Companies  vs.  G Collado SAB

The Travelers Companies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Travelers Companies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Travelers Companies showed solid returns over the last few months and may actually be approaching a breakup point.

G Collado SAB

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G Collado SAB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, G Collado is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Travelers Companies and G Collado

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

The idea behind The Travelers Companies and G Collado SAB 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.