Correlation Between Travelers Companies and 552953CF6

Can any of the company-specific risk be diversified away by investing in both Travelers Companies and 552953CF6 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 552953CF6 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 MGM RESORTS INTL, you can compare the effects of market volatilities on Travelers Companies and 552953CF6 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 552953CF6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and 552953CF6.

Diversification Opportunities for Travelers Companies and 552953CF6

-0.18

Correlation Coefficient

Travelers Companies  552953CF6

Good diversification

The 3 months correlation between Travelers and 552953CF6 is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and MGM RESORTS INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGM RESORTS INTL 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 552953CF6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGM RESORTS INTL has no effect on the direction of Travelers Companies i.e., Travelers Companies and 552953CF6 go up and down completely randomly.

Pair Corralation between Travelers Companies and 552953CF6

Considering the 90-day investment horizon The Travelers Companies is expected to generate 4.53 times more return on investment than 552953CF6. However, Travelers Companies is 4.53 times more volatile than MGM RESORTS INTL. It trades about -0.01 of its potential returns per unit of risk. MGM RESORTS INTL is currently generating about -0.04 per unit of risk. If you would invest  26,776  in The Travelers Companies on May 7, 2025 and sell it today you would lose (259.00) from holding The Travelers Companies or give up 0.97% of portfolio value over 90 days.

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

The Travelers Companies  vs.  MGM RESORTS INTL

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.

MGM RESORTS INTL

Risk-Adjusted Performance

Weakest

Over the last 90 days MGM RESORTS INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 552953CF6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Travelers Companies and 552953CF6

The main advantage of trading using opposite Travelers Companies and 552953CF6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, 552953CF6 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 552953CF6 will offset losses from the drop in 552953CF6's long position.

The idea behind The Travelers Companies and MGM RESORTS INTL 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.