Correlation Between PIONEER FLEXIBLE and Travelers Companies

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

Diversification Opportunities for PIONEER FLEXIBLE and Travelers Companies

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between PIONEER and Travelers is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding PIONEER FLEXIBLE OPPORTUNITIES 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 PIONEER FLEXIBLE 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 PIONEER FLEXIBLE OPPORTUNITIES 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 PIONEER FLEXIBLE i.e., PIONEER FLEXIBLE and Travelers Companies go up and down completely randomly.

Pair Corralation between PIONEER FLEXIBLE and Travelers Companies

Assuming the 90 days horizon PIONEER FLEXIBLE OPPORTUNITIES is expected to generate 0.76 times more return on investment than Travelers Companies. However, PIONEER FLEXIBLE OPPORTUNITIES is 1.32 times less risky than Travelers Companies. It trades about 0.27 of its potential returns per unit of risk. The Travelers Companies is currently generating about 0.17 per unit of risk. If you would invest  1,128  in PIONEER FLEXIBLE OPPORTUNITIES on September 6, 2022 and sell it today you would earn a total of  41.00  from holding PIONEER FLEXIBLE OPPORTUNITIES or generate 3.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

PIONEER FLEXIBLE OPPORTUNITIES  vs.  The Travelers Companies

 Performance (%) 
       Timeline  
PIONEER FLEXIBLE OPP 
PIONEER Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in PIONEER FLEXIBLE OPPORTUNITIES are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, PIONEER FLEXIBLE is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

PIONEER Price Channel

The Travelers Companies 
Travelers Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in The Travelers Companies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Travelers Companies showed solid returns over the last few months and may actually be approaching a breakup point.

Travelers Price Channel

PIONEER FLEXIBLE and Travelers Companies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PIONEER FLEXIBLE and Travelers Companies

The main advantage of trading using opposite PIONEER FLEXIBLE and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIONEER FLEXIBLE 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.
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The idea behind PIONEER FLEXIBLE OPPORTUNITIES 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.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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