Correlation Between SANOK RUBBER and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER 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 SANOK RUBBER and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANOK RUBBER ZY and HANOVER INSURANCE, you can compare the effects of market volatilities on SANOK RUBBER 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 SANOK RUBBER with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and HANOVER INSURANCE.
Diversification Opportunities for SANOK RUBBER and HANOVER INSURANCE
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SANOK and HANOVER is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and SANOK RUBBER 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 SANOK RUBBER ZY 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 SANOK RUBBER i.e., SANOK RUBBER and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between SANOK RUBBER and HANOVER INSURANCE
Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 1.97 times more return on investment than HANOVER INSURANCE. However, SANOK RUBBER is 1.97 times more volatile than HANOVER INSURANCE. It trades about 0.08 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.03 per unit of risk. If you would invest 167.00 in SANOK RUBBER ZY on August 26, 2024 and sell it today you would earn a total of 267.00 from holding SANOK RUBBER ZY or generate 159.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANOK RUBBER ZY vs. HANOVER INSURANCE
Performance |
| Timeline |
| SANOK RUBBER ZY |
| HANOVER INSURANCE |
SANOK RUBBER and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOK RUBBER and HANOVER INSURANCE
The main advantage of trading using opposite SANOK RUBBER and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER 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.| SANOK RUBBER vs. PT Astra International | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. NMI Holdings | SANOK RUBBER vs. Origin Agritech |
| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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