Correlation Between Travelers Companies and Snipp Interactive

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

Diversification Opportunities for Travelers Companies and Snipp Interactive

-0.64

Correlation Coefficient

Travelers Companies  Snipp Interactive

Excellent diversification

The 3 months correlation between Travelers and Snipp is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Snipp Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snipp Interactive 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 Snipp Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snipp Interactive has no effect on the direction of Travelers Companies i.e., Travelers Companies and Snipp Interactive go up and down completely randomly.

Pair Corralation between Travelers Companies and Snipp Interactive

Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.28 times more return on investment than Snipp Interactive. However, The Travelers Companies is 3.51 times less risky than Snipp Interactive. It trades about 0.09 of its potential returns per unit of risk. Snipp Interactive is currently generating about -0.05 per unit of risk. If you would invest  21,457  in The Travelers Companies on August 9, 2024 and sell it today you would earn a total of  3,771  from holding The Travelers Companies or generate 17.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.2%
Values	Daily Returns

The Travelers Companies  vs.  Snipp Interactive

The Travelers Companies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Travelers Companies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Travelers Companies showed solid returns over the last few months and may actually be approaching a breakup point.

Snipp Interactive

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Snipp Interactive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Snipp Interactive is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Travelers Companies and Snipp Interactive

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

The idea behind The Travelers Companies and Snipp Interactive 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.