Correlation Between SOFTBANK CORP and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both SOFTBANK CORP 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 SOFTBANK CORP and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFTBANK P ADR and The Hanover Insurance, you can compare the effects of market volatilities on SOFTBANK CORP 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 SOFTBANK CORP with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTBANK CORP and Hanover Insurance.
Diversification Opportunities for SOFTBANK CORP and Hanover Insurance
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOFTBANK and Hanover is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding SOFTBANK P ADR and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and SOFTBANK CORP 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 SOFTBANK P ADR 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 SOFTBANK CORP i.e., SOFTBANK CORP and Hanover Insurance go up and down completely randomly.
Pair Corralation between SOFTBANK CORP and Hanover Insurance
Assuming the 90 days trading horizon SOFTBANK CORP is expected to generate 18.83 times less return on investment than Hanover Insurance. In addition to that, SOFTBANK CORP is 2.87 times more volatile than The Hanover Insurance. It trades about 0.01 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about 0.36 per unit of volatility. If you would invest 13,500 in The Hanover Insurance on August 31, 2024 and sell it today you would earn a total of 1,900 from holding The Hanover Insurance or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOFTBANK P ADR vs. The Hanover Insurance
Performance |
| Timeline |
| SOFTBANK P ADR |
| Hanover Insurance |
SOFTBANK CORP and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTBANK CORP and Hanover Insurance
The main advantage of trading using opposite SOFTBANK CORP and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTBANK CORP 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.| SOFTBANK CORP vs. Check Point Software | SOFTBANK CORP vs. Harmony Gold Mining | SOFTBANK CORP vs. 24SEVENOFFICE GROUP AB | SOFTBANK CORP vs. GREENX METALS LTD |
| Hanover Insurance vs. Pentair plc | Hanover Insurance vs. AIR LIQUIDE ADR | Hanover Insurance vs. Norwegian Air Shuttle | Hanover Insurance vs. Computer And Technologies |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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