Correlation Between Travelers Companies and Gatekeeper Systems

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

Diversification Opportunities for Travelers Companies and Gatekeeper Systems

-0.67

Correlation Coefficient

Travelers Companies  Gatekeeper Systems

Excellent diversification

The 3 months correlation between Travelers and Gatekeeper is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Gatekeeper Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatekeeper Systems 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 Gatekeeper Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatekeeper Systems has no effect on the direction of Travelers Companies i.e., Travelers Companies and Gatekeeper Systems go up and down completely randomly.

Pair Corralation between Travelers Companies and Gatekeeper Systems

Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the Gatekeeper Systems. But the stock apears to be less risky and, when comparing its historical volatility, The Travelers Companies is 5.31 times less risky than Gatekeeper Systems. The stock trades about -0.03 of its potential returns per unit of risk. The Gatekeeper Systems is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  32.00  in Gatekeeper Systems on May 6, 2025 and sell it today you would earn a total of  62.00  from holding Gatekeeper Systems or generate 193.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

The Travelers Companies  vs.  Gatekeeper Systems

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.

Gatekeeper Systems

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gatekeeper Systems are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Gatekeeper Systems reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Travelers Companies and Gatekeeper Systems

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

The idea behind The Travelers Companies and Gatekeeper Systems 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.