Correlation Between Hanover Insurance and Computer
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Computer 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 Hanover Insurance and Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hanover Insurance and Computer And Technologies, you can compare the effects of market volatilities on Hanover Insurance and Computer 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 Hanover Insurance with a short position of Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Computer.
Diversification Opportunities for Hanover Insurance and Computer
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanover and Computer is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies and Hanover Insurance 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 Hanover Insurance are associated (or correlated) with Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Computer go up and down completely randomly.
Pair Corralation between Hanover Insurance and Computer
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.73 times more return on investment than Computer. However, The Hanover Insurance is 1.36 times less risky than Computer. It trades about 0.12 of its potential returns per unit of risk. Computer And Technologies is currently generating about -0.1 per unit of risk. If you would invest 13,119 in The Hanover Insurance on September 24, 2024 and sell it today you would earn a total of 1,481 from holding The Hanover Insurance or generate 11.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
The Hanover Insurance vs. Computer And Technologies
Performance |
Timeline |
Hanover Insurance |
Computer And Technologies |
Hanover Insurance and Computer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanover Insurance and Computer
The main advantage of trading using opposite Hanover Insurance and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.Hanover Insurance vs. Tokio Marine Holdings | Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. Loews Corp |
Computer vs. The Hanover Insurance | Computer vs. INSURANCE AUST GRP | Computer vs. LIFENET INSURANCE CO | Computer vs. Universal Insurance Holdings |
Check out your portfolio center.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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