Correlation Between AWILCO DRILLING and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both AWILCO DRILLING and HANOVER INSURANCE 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 AWILCO DRILLING and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AWILCO DRILLING PLC and HANOVER INSURANCE, you can compare the effects of market volatilities on AWILCO DRILLING and HANOVER INSURANCE 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 AWILCO DRILLING with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AWILCO DRILLING and HANOVER INSURANCE.
Diversification Opportunities for AWILCO DRILLING and HANOVER INSURANCE
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between AWILCO and HANOVER is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding AWILCO DRILLING PLC and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and AWILCO DRILLING 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 AWILCO DRILLING PLC are associated (or correlated) with HANOVER INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANOVER INSURANCE has no effect on the direction of AWILCO DRILLING i.e., AWILCO DRILLING and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between AWILCO DRILLING and HANOVER INSURANCE
Assuming the 90 days trading horizon AWILCO DRILLING is expected to generate 1.97 times less return on investment than HANOVER INSURANCE. In addition to that, AWILCO DRILLING is 2.86 times more volatile than HANOVER INSURANCE. It trades about 0.03 of its total potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.15 per unit of volatility. If you would invest 11,832 in HANOVER INSURANCE on August 25, 2024 and sell it today you would earn a total of 3,368 from holding HANOVER INSURANCE or generate 28.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AWILCO DRILLING PLC vs. HANOVER INSURANCE
Performance |
| Timeline |
| AWILCO DRILLING PLC |
| HANOVER INSURANCE |
AWILCO DRILLING and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AWILCO DRILLING and HANOVER INSURANCE
The main advantage of trading using opposite AWILCO DRILLING and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AWILCO DRILLING position performs unexpectedly, HANOVER INSURANCE 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 HANOVER INSURANCE will offset losses from the drop in HANOVER INSURANCE's long position.| AWILCO DRILLING vs. Apple Inc | AWILCO DRILLING vs. Apple Inc | AWILCO DRILLING vs. Apple Inc | AWILCO DRILLING vs. Apple Inc |
| HANOVER INSURANCE vs. SCANSOURCE | HANOVER INSURANCE vs. FIREWEED METALS P | HANOVER INSURANCE vs. MOLSON RS BEVERAGE | HANOVER INSURANCE vs. THAI BEVERAGE |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |