Correlation Between Travelers Companies and Picc Prop

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Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Picc Prop 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 Picc Prop 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 Picc Prop Casualty, you can compare the effects of market volatilities on Travelers Companies and Picc Prop 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 Picc Prop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Picc Prop.

Diversification Opportunities for Travelers Companies and Picc Prop

-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between Travelers and PPCCF is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Picc Prop Casualty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picc Prop Casualty 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 Picc Prop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picc Prop Casualty has no effect on the direction of Travelers Companies i.e., Travelers Companies and Picc Prop go up and down completely randomly.

Pair Corralation between Travelers Companies and Picc Prop

Considering the 90-day investment horizon Travelers Companies is expected to generate 1.23 times less return on investment than Picc Prop. But when comparing it to its historical volatility, The Travelers Companies is 1.22 times less risky than Picc Prop. It trades about 0.06 of its potential returns per unit of risk. Picc Prop Casualty is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  68.00  in Picc Prop Casualty on July 6, 2022 and sell it today you would earn a total of  37.00  from holding Picc Prop Casualty or generate 54.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

The Travelers Companies  vs.  Picc Prop Casualty

 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

Picc Prop Casualty 
PPCCF Performance
0 of 100
Over the last 90 days Picc Prop Casualty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Picc Prop is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

PPCCF Price Channel

Travelers Companies and Picc Prop Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Travelers Companies and Picc Prop

The main advantage of trading using opposite Travelers Companies and Picc Prop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Picc Prop 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 Picc Prop will offset losses from the drop in Picc Prop's long position.
Travelers Companies vs. Amazon Inc
The idea behind The Travelers Companies and Picc Prop Casualty 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.
Picc Prop vs. Amazon Inc
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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