Correlation Between Travelers Companies and Fidelity Small

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

Diversification Opportunities for Travelers Companies and Fidelity Small

-0.52

Correlation Coefficient

Travelers Companies  Fidelity Small

Excellent diversification

The 3 months correlation between Travelers and Fidelity is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Fidelity Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Small Cap 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 Fidelity Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Small Cap has no effect on the direction of Travelers Companies i.e., Travelers Companies and Fidelity Small go up and down completely randomly.

Pair Corralation between Travelers Companies and Fidelity Small

Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the Fidelity Small. In addition to that, Travelers Companies is 1.32 times more volatile than Fidelity Small Cap. It trades about -0.02 of its total potential returns per unit of risk. Fidelity Small Cap is currently generating about 0.19 per unit of volatility. If you would invest  3,002  in Fidelity Small Cap on May 7, 2025 and sell it today you would earn a total of  363.00  from holding Fidelity Small Cap or generate 12.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

The Travelers Companies  vs.  Fidelity Small Cap

The Travelers Companies

Risk-Adjusted Performance

Very Weak

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 fairly stable basic indicators, Travelers Companies is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fidelity Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Small Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fidelity Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Travelers Companies and Fidelity Small

The main advantage of trading using opposite Travelers Companies and Fidelity Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Fidelity Small 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 Fidelity Small will offset losses from the drop in Fidelity Small's long position.

The idea behind The Travelers Companies and Fidelity Small Cap 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.