Correlation Between Travelers Companies and Murphy USA

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

Diversification Opportunities for Travelers Companies and Murphy USA

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between Travelers and Murphy is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Murphy USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murphy USA 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 Murphy USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murphy USA has no effect on the direction of Travelers Companies i.e., Travelers Companies and Murphy USA go up and down completely randomly.

Pair Corralation between Travelers Companies and Murphy USA

Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the Murphy USA. But the stock apears to be less risky and, when comparing its historical volatility, The Travelers Companies is 1.27 times less risky than Murphy USA. The stock trades about -0.16 of its potential returns per unit of risk. The Murphy USA is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  29,017  in Murphy USA on July 2, 2022 and sell it today you would lose (1,269)  from holding Murphy USA or give up 4.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

The Travelers Companies  vs.  Murphy USA

 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

Murphy USA 
Murphy Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Murphy USA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Murphy USA sustained solid returns over the last few months and may actually be approaching a breakup point.

Murphy Price Channel

Travelers Companies and Murphy USA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Travelers Companies and Murphy USA

The main advantage of trading using opposite Travelers Companies and Murphy USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Murphy USA 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 Murphy USA will offset losses from the drop in Murphy USA's long position.
Travelers Companies vs. Amazon Inc
The idea behind The Travelers Companies and Murphy USA 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.
Murphy USA vs. Best Buy Company
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

Other Complementary Tools

Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
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
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go