Correlation Between Travelers Companies and RDE, Common

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

Diversification Opportunities for Travelers Companies and RDE, Common

-0.62

Correlation Coefficient

Travelers Companies  RDE, Common

Excellent diversification

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

Pair Corralation between Travelers Companies and RDE, Common

If you would invest  142.00  in RDE, Common Stock on September 13, 2024 and sell it today you would earn a total of  0.00  from holding RDE, Common Stock or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

The Travelers Companies  vs.  RDE, Common Stock

The Travelers Companies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Travelers Companies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Travelers Companies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

RDE, Common Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RDE, Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Travelers Companies and RDE, Common

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

The idea behind The Travelers Companies and RDE, Common Stock 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.