Correlation Between Travelers Companies and Gncc Capital

Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Gncc Capital 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 Gncc Capital 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 Gncc Capital, you can compare the effects of market volatilities on Travelers Companies and Gncc Capital 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 Gncc Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Gncc Capital.

Diversification Opportunities for Travelers Companies and Gncc Capital

-0.15

Correlation Coefficient

Travelers Companies  Gncc Capital

Good diversification

The 3 months correlation between Travelers and Gncc is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Gncc Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gncc Capital 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 Gncc Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gncc Capital has no effect on the direction of Travelers Companies i.e., Travelers Companies and Gncc Capital go up and down completely randomly.

Pair Corralation between Travelers Companies and Gncc Capital

Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the Gncc Capital. But the stock apears to be less risky and, when comparing its historical volatility, The Travelers Companies is 123.31 times less risky than Gncc Capital. The stock trades about -0.01 of its potential returns per unit of risk. The Gncc Capital is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Gncc Capital on December 1, 2024 and sell it today you would earn a total of  0.01  from holding Gncc Capital or generate 9.223372036854776E16% return on investment over 90 days.

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

The Travelers Companies  vs.  Gncc Capital

The Travelers Companies

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Travelers Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Travelers Companies is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Gncc Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gncc Capital are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Gncc Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Travelers Companies and Gncc Capital

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

The idea behind The Travelers Companies and Gncc Capital 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.