Correlation Between Travelers Companies and Deere
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Deere 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 Deere 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 Deere Company, you can compare the effects of market volatilities on Travelers Companies and Deere 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 Deere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Deere.
Diversification Opportunities for Travelers Companies and Deere
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Deere is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Deere Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deere Company 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 Deere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deere Company has no effect on the direction of Travelers Companies i.e., Travelers Companies and Deere go up and down completely randomly.
Pair Corralation between Travelers Companies and Deere
Considering the 90-day investment horizon Travelers Companies is expected to generate 3.55 times less return on investment than Deere. But when comparing it to its historical volatility, The Travelers Companies is 1.42 times less risky than Deere. It trades about 0.24 of its potential returns per unit of risk. Deere Company is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest 36,066 in Deere Company on December 29, 2023 and sell it today you would earn a total of 4,848 from holding Deere Company or generate 13.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
The Travelers Companies vs. Deere Company
Performance |
Timeline |
The Travelers Companies |
Deere Company |
Travelers Companies and Deere Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Travelers Companies and Deere
The main advantage of trading using opposite Travelers Companies and Deere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Deere 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 Deere will offset losses from the drop in Deere's long position.Travelers Companies vs. Loews Corp | Travelers Companies vs. American Financial Group | Travelers Companies vs. Hartford Financial Services | Travelers Companies vs. Horace Mann Educators |
Deere vs. GreenPower Motor | Deere vs. Hyster Yale Materials Handling | Deere vs. Manitex International | Deere vs. NikolaCorp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |