Correlation Between Promotora and Travelers Companies
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By analyzing existing cross correlation between Promotora y Operadora and The Travelers Companies, you can compare the effects of market volatilities on Promotora 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 Promotora with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promotora and Travelers Companies.
Diversification Opportunities for Promotora and Travelers Companies
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Promotora and Travelers is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Promotora y Operadora 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 Promotora 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 Promotora y Operadora 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 Promotora i.e., Promotora and Travelers Companies go up and down completely randomly.
Pair Corralation between Promotora and Travelers Companies
Assuming the 90 days trading horizon Promotora y Operadora is expected to generate 0.48 times more return on investment than Travelers Companies. However, Promotora y Operadora is 2.07 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 0.08 per unit of risk. If you would invest 11,896 in Promotora y Operadora on September 26, 2024 and sell it today you would earn a total of 3,103 from holding Promotora y Operadora or generate 26.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Promotora y Operadora vs. The Travelers Companies
Performance |
Timeline |
Promotora y Operadora |
The Travelers Companies |
Promotora and Travelers Companies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Promotora and Travelers Companies
The main advantage of trading using opposite Promotora and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promotora 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.The idea behind Promotora y Operadora 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.Travelers Companies vs. Capital One Financial | Travelers Companies vs. The Bank of | Travelers Companies vs. Monster Beverage Corp | Travelers Companies vs. CVS Health |
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 the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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