Correlation Between Dupont Denemours and Travelers Companies

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Dupont Denemours and Travelers Companies 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 Dupont Denemours and Travelers Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont Denemours and The Travelers Companies, you can compare the effects of market volatilities on Dupont Denemours 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 Dupont Denemours with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont Denemours and Travelers Companies.

Diversification Opportunities for Dupont Denemours and Travelers Companies

-0.13
  Correlation Coefficient

Good diversification

The 9 months correlation between Dupont and Travelers is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dupont Denemours 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 Dupont Denemours 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 Dupont Denemours 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 Dupont Denemours i.e., Dupont Denemours and Travelers Companies go up and down completely randomly.

Pair Corralation between Dupont Denemours and Travelers Companies

Allowing for the 90-day total investment horizon Dupont Denemours is expected to under-perform the Travelers Companies. In addition to that, Dupont Denemours is 1.35 times more volatile than The Travelers Companies. It trades about -0.01 of its total potential returns per unit of risk. The Travelers Companies is currently generating about 0.05 per unit of volatility. If you would invest  16,735  in The Travelers Companies on May 20, 2022 and sell it today you would earn a total of  661.00  from holding The Travelers Companies or generate 3.95% return on investment over 90 days.
Time Period9 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dupont Denemours  vs.  The Travelers Companies

 Performance (%) 
       Timeline  
Dupont Denemours 
Dupont Performance
0 of 100
Over the last 90 days Dupont Denemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Dupont Price Channel

The Travelers Companies 
Travelers Performance
3 of 100
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.

Travelers Price Channel

Dupont Denemours and Travelers Companies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dupont Denemours and Travelers Companies

The main advantage of trading using opposite Dupont Denemours and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont Denemours 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.
The idea behind Dupont Denemours and The Travelers Companies 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.
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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

Other Complementary Tools

Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go