Correlation Between Travelers Companies and Astronics Corp
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Astronics Corp 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 Astronics Corp 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 Astronics Corp Cl, you can compare the effects of market volatilities on Travelers Companies and Astronics Corp 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 Astronics Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Astronics Corp.
Diversification Opportunities for Travelers Companies and Astronics Corp
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Travelers and Astronics is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Astronics Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics Corp Cl 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 Astronics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics Corp Cl has no effect on the direction of Travelers Companies i.e., Travelers Companies and Astronics Corp go up and down completely randomly.
Pair Corralation between Travelers Companies and Astronics Corp
Considering the 90-day investment horizon Travelers Companies is expected to generate 2.55 times less return on investment than Astronics Corp. But when comparing it to its historical volatility, The Travelers Companies is 3.33 times less risky than Astronics Corp. It trades about 0.06 of its potential returns per unit of risk. Astronics Corp Cl is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 960.00 in Astronics Corp Cl on September 6, 2024 and sell it today you would earn a total of 624.00 from holding Astronics Corp Cl or generate 65.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 82.42% |
Values | Daily Returns |
The Travelers Companies vs. Astronics Corp Cl
Performance |
Timeline |
The Travelers Companies |
Astronics Corp Cl |
Travelers Companies and Astronics Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Travelers Companies and Astronics Corp
The main advantage of trading using opposite Travelers Companies and Astronics Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Astronics Corp 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 Astronics Corp will offset losses from the drop in Astronics Corp's long position.Travelers Companies vs. Progressive Corp | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley | Travelers Companies vs. Markel |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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