Correlation Between Grupo Carso and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Grupo Carso 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 Grupo Carso and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Carso SAB and The Hanover Insurance, you can compare the effects of market volatilities on Grupo Carso 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 Grupo Carso with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Hanover Insurance.
Diversification Opportunities for Grupo Carso and Hanover Insurance
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grupo and Hanover is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Grupo Carso 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 Grupo Carso SAB 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 Grupo Carso i.e., Grupo Carso and Hanover Insurance go up and down completely randomly.
Pair Corralation between Grupo Carso and Hanover Insurance
Assuming the 90 days horizon Grupo Carso is expected to generate 2.02 times less return on investment than Hanover Insurance. In addition to that, Grupo Carso is 1.59 times more volatile than The Hanover Insurance. It trades about 0.12 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about 0.39 per unit of volatility. If you would invest 13,400 in The Hanover Insurance on September 4, 2024 and sell it today you would earn a total of 2,100 from holding The Hanover Insurance or generate 15.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grupo Carso SAB vs. The Hanover Insurance
Performance |
| Timeline |
| Grupo Carso SAB |
| Hanover Insurance |
Grupo Carso and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and Hanover Insurance
The main advantage of trading using opposite Grupo Carso and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso 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.| Grupo Carso vs. Honeywell International | Grupo Carso vs. Hitachi | Grupo Carso vs. CITIC Limited | Grupo Carso vs. CK HUTCHISON HLDGS |
| Hanover Insurance vs. Khiron Life Sciences | Hanover Insurance vs. Chunghwa Telecom Co | Hanover Insurance vs. Citic Telecom International | Hanover Insurance vs. RELIANCE STEEL AL |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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