Correlation Between Travelers Companies and IShares Core

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

Diversification Opportunities for Travelers Companies and IShares Core

-0.68

Correlation Coefficient

Travelers Companies  IShares Core

Excellent diversification

The 3 months correlation between Travelers and IShares is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and iShares Core High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core High 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core High has no effect on the direction of Travelers Companies i.e., Travelers Companies and IShares Core go up and down completely randomly.

Pair Corralation between Travelers Companies and IShares Core

Considering the 90-day investment horizon The Travelers Companies is expected to under-perform the IShares Core. In addition to that, Travelers Companies is 2.16 times more volatile than iShares Core High. It trades about -0.01 of its total potential returns per unit of risk. iShares Core High is currently generating about 0.12 per unit of volatility. If you would invest  11,381  in iShares Core High on May 8, 2025 and sell it today you would earn a total of  538.00  from holding iShares Core High or generate 4.73% return on investment over 90 days.

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

The Travelers Companies  vs.  iShares Core High

The Travelers Companies

Risk-Adjusted Performance

Weakest

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 newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

iShares Core High

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core High are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, IShares Core is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Travelers Companies and IShares Core

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

The idea behind The Travelers Companies and iShares Core High 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.