Correlation Between Travelers Companies and Twitter
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Twitter 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 Twitter 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 Twitter, you can compare the effects of market volatilities on Travelers Companies and Twitter 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 Twitter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Twitter.
Diversification Opportunities for Travelers Companies and Twitter
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Travelers and Twitter is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Twitter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twitter 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 Twitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twitter has no effect on the direction of Travelers Companies i.e., Travelers Companies and Twitter go up and down completely randomly.
Pair Corralation between Travelers Companies and Twitter
If you would invest 17,046 in The Travelers Companies on January 24, 2024 and sell it today you would earn a total of 4,381 from holding The Travelers Companies or generate 25.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 0.54% |
Values | Daily Returns |
The Travelers Companies vs. Twitter
Performance |
Timeline |
The Travelers Companies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travelers Companies and Twitter Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Travelers Companies and Twitter
The main advantage of trading using opposite Travelers Companies and Twitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Twitter 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 Twitter will offset losses from the drop in Twitter's long position.Travelers Companies vs. Aquagold International | Travelers Companies vs. Thrivent High Yield | Travelers Companies vs. Morningstar Unconstrained Allocation | Travelers Companies vs. Via Renewables |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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