Correlation Between Travelers Companies and International Business

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

Diversification Opportunities for Travelers Companies and International Business

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Travelers and International is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Travelers Companies i.e., Travelers Companies and International Business go up and down completely randomly.

Pair Corralation between Travelers Companies and International Business

Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.11 times more return on investment than International Business. However, Travelers Companies is 1.11 times more volatile than International Business Machines. It trades about -0.19 of its potential returns per unit of risk. International Business Machines is currently generating about -0.29 per unit of risk. If you would invest  16,178  in The Travelers Companies on July 4, 2022 and sell it today you would lose (858.00)  from holding The Travelers Companies or give up 5.3% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

The Travelers Companies  vs.  International Business Machine

 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 latest conflicting performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Travelers Price Channel

International Business 
International Performance
0 of 100
Over the last 90 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's fundamental drivers remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

International Price Channel

Travelers Companies and International Business Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Travelers Companies and International Business

The main advantage of trading using opposite Travelers Companies and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.
Travelers Companies vs. Amazon Inc
The idea behind The Travelers Companies and International Business Machines 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.
International Business vs. National Australia B
International Business vs. Royal Bank
International Business vs. Wells Fargo
International Business vs. Brookfield Infrastructure Partners
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

Other Complementary Tools

ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Shere Portfolio
Track or share privately all of your investments from the convenience of any device
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go