Correlation Between Travelers Companies and MusclePharm

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

Diversification Opportunities for Travelers Companies and MusclePharm

0.0

Correlation Coefficient

Travelers Companies  MusclePharm

Pay attention - limited upside

The 3 months correlation between Travelers and MusclePharm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and MusclePharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MusclePharm 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 MusclePharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MusclePharm has no effect on the direction of Travelers Companies i.e., Travelers Companies and MusclePharm go up and down completely randomly.

Pair Corralation between Travelers Companies and MusclePharm

If you would invest  24,038  in The Travelers Companies on December 23, 2024 and sell it today you would earn a total of  1,632  from holding The Travelers Companies or generate 6.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

The Travelers Companies  vs.  MusclePharm

The Travelers Companies

Risk-Adjusted Performance

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 inconsistent basic indicators, Travelers Companies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MusclePharm

Risk-Adjusted Performance

Very Weak

Over the last 90 days MusclePharm has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, MusclePharm is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Travelers Companies and MusclePharm

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

The idea behind The Travelers Companies and MusclePharm 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.