Correlation Between 594918AR5 and Travelers Companies
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By analyzing existing cross correlation between MICROSOFT P 35 and The Travelers Companies, you can compare the effects of market volatilities on 594918AR5 and Travelers Companies 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 594918AR5 with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of 594918AR5 and Travelers Companies.
Diversification Opportunities for 594918AR5 and Travelers Companies
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 594918AR5 and Travelers is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding MICROSOFT CORP 3.5% 15Nov2042 and The Travelers Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Travelers Companies and 594918AR5 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 MICROSOFT P 35 are associated (or correlated) with Travelers Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Travelers Companies has no effect on the direction of 594918AR5 i.e., 594918AR5 and Travelers Companies go up and down completely randomly.
Pair Corralation between 594918AR5 and Travelers Companies
Assuming the 90 days trading horizon MICROSOFT P 35 is expected to generate 11.98 times more return on investment than Travelers Companies. However, 594918AR5 is 11.98 times more volatile than The Travelers Companies. It trades about 0.22 of its potential returns per unit of risk. The Travelers Companies is currently generating about 0.24 per unit of risk. If you would invest 8,366 in MICROSOFT P 35 on December 29, 2023 and sell it today you would earn a total of 3,406 from holding MICROSOFT P 35 or generate 40.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.65% |
Values | Daily Returns |
MICROSOFT CORP 3.5% 15Nov2042 vs. The Travelers Companies
Performance |
Timeline |
MICROSOFT P 35 |
The Travelers Companies |
594918AR5 and Travelers Companies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 594918AR5 and Travelers Companies
The main advantage of trading using opposite 594918AR5 and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 594918AR5 position performs unexpectedly, Travelers Companies 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 Travelers Companies will offset losses from the drop in Travelers Companies' long position.594918AR5 vs. AEP TEX INC | 594918AR5 vs. US BANK NATIONAL | 594918AR5 vs. Volkswagen AG | 594918AR5 vs. Ross Stores |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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