Correlation Between Travelers Companies and Infinera

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

Diversification Opportunities for Travelers Companies and Infinera

-0.49

Correlation Coefficient

Travelers Companies  Infinera

Very good diversification

The 3 months correlation between Travelers and Infinera is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Infinera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinera 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 Infinera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinera has no effect on the direction of Travelers Companies i.e., Travelers Companies and Infinera go up and down completely randomly.

Pair Corralation between Travelers Companies and Infinera

If you would invest  664.00  in Infinera on May 6, 2025 and sell it today you would earn a total of  0.00  from holding Infinera or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

The Travelers Companies  vs.  Infinera

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.

Infinera

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infinera has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Infinera is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Travelers Companies and Infinera

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

The idea behind The Travelers Companies and Infinera 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.