Correlation Between Travelers Companies and A10 Networks

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and A10 Networks 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 A10 Networks 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 A10 Networks, you can compare the effects of market volatilities on Travelers Companies and A10 Networks 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 A10 Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and A10 Networks.

Diversification Opportunities for Travelers Companies and A10 Networks

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Travelers and A10 Networks is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and A10 Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A10 Networks 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 A10 Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A10 Networks has no effect on the direction of Travelers Companies i.e., Travelers Companies and A10 Networks go up and down completely randomly.

Pair Corralation between Travelers Companies and A10 Networks

Considering the 90-day investment horizon Travelers Companies is expected to generate 2.1 times less return on investment than A10 Networks. But when comparing it to its historical volatility, The Travelers Companies is 2.3 times less risky than A10 Networks. It trades about 0.06 of its potential returns per unit of risk. A10 Networks is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  826.00  in A10 Networks on May 10, 2022 and sell it today you would earn a total of  729.00  from holding A10 Networks or generate 88.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

The Travelers Companies  vs.  A10 Networks

 Performance (%) 
       Timeline  
The Travelers Companies 
Travelers Performance
0 of 100
Over the last 90 days The Travelers Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Travelers Companies is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Travelers Price Channel

A10 Networks 
A10 Networks Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in A10 Networks are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, A10 Networks disclosed solid returns over the last few months and may actually be approaching a breakup point.

A10 Networks Price Channel

Travelers Companies and A10 Networks Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Travelers Companies and A10 Networks

The main advantage of trading using opposite Travelers Companies and A10 Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, A10 Networks 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 A10 Networks will offset losses from the drop in A10 Networks' long position.
The idea behind The Travelers Companies and A10 Networks 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go