Correlation Between Resource America and Travelers Companies
Can any of the company-specific risk be diversified away by investing in both Resource America and Travelers Companies 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 Resource America and Travelers Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource America and The Travelers Companies, you can compare the effects of market volatilities on Resource America 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 Resource America with a short position of Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource America and Travelers Companies.
Diversification Opportunities for Resource America and Travelers Companies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Resource and Travelers is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Resource America 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 Resource America 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 Resource America 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 Resource America i.e., Resource America and Travelers Companies go up and down completely randomly.
Pair Corralation between Resource America and Travelers Companies
If you would invest (100.00) in Resource America on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Resource America or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Resource America vs. The Travelers Companies
Performance |
Timeline |
Resource America |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
The Travelers Companies |
Resource America and Travelers Companies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Resource America and Travelers Companies
The main advantage of trading using opposite Resource America and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resource America 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.Resource America vs. Seadrill Limited | Resource America vs. Barings BDC | Resource America vs. PennantPark Floating Rate | Resource America vs. Transocean |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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