Correlation Between CREO MEDICAL and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL 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 CREO MEDICAL and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CREO MEDICAL GRP and HANOVER INSURANCE, you can compare the effects of market volatilities on CREO MEDICAL 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 CREO MEDICAL with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and HANOVER INSURANCE.
Diversification Opportunities for CREO MEDICAL and HANOVER INSURANCE
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CREO and HANOVER is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and CREO MEDICAL 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 CREO MEDICAL GRP 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 CREO MEDICAL i.e., CREO MEDICAL and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between CREO MEDICAL and HANOVER INSURANCE
Assuming the 90 days horizon CREO MEDICAL GRP is expected to generate 3.31 times more return on investment than HANOVER INSURANCE. However, CREO MEDICAL is 3.31 times more volatile than HANOVER INSURANCE. It trades about 0.02 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.03 per unit of risk. If you would invest 21.00 in CREO MEDICAL GRP on November 5, 2024 and sell it today you would lose (1.00) from holding CREO MEDICAL GRP or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREO MEDICAL GRP vs. HANOVER INSURANCE
Performance |
| Timeline |
| CREO MEDICAL GRP |
| HANOVER INSURANCE |
CREO MEDICAL and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and HANOVER INSURANCE
The main advantage of trading using opposite CREO MEDICAL and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL 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.| CREO MEDICAL vs. Titan Machinery | CREO MEDICAL vs. CHRYSALIS INVESTMENTS LTD | CREO MEDICAL vs. FARM 51 GROUP | CREO MEDICAL vs. Hanison Construction Holdings |
| HANOVER INSURANCE vs. Singapore Airlines Limited | HANOVER INSURANCE vs. SOUTHWEST AIRLINES | HANOVER INSURANCE vs. Southwest Airlines Co | HANOVER INSURANCE vs. ASURE SOFTWARE |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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