Correlation Between Travelers Companies and Moneygram Int

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

Diversification Opportunities for Travelers Companies and Moneygram Int

-0.62

Correlation Coefficient

Travelers Companies  Moneygram Int

Excellent diversification

The 3 months correlation between Travelers and Moneygram is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Moneygram Int in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moneygram Int 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 Moneygram Int. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moneygram Int has no effect on the direction of Travelers Companies i.e., Travelers Companies and Moneygram Int go up and down completely randomly.

Pair Corralation between Travelers Companies and Moneygram Int

If you would invest  20,367  in The Travelers Companies on October 20, 2024 and sell it today you would earn a total of  3,585  from holding The Travelers Companies or generate 17.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.8%
Values	Daily Returns

The Travelers Companies  vs.  Moneygram Int

The Travelers Companies

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Moneygram Int

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moneygram Int has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Moneygram Int is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Travelers Companies and Moneygram Int

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

The idea behind The Travelers Companies and Moneygram Int 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.