Correlation Between GREENX METALS and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both GREENX METALS 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 GREENX METALS and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENX METALS LTD and HANOVER INSURANCE, you can compare the effects of market volatilities on GREENX METALS 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 GREENX METALS with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and HANOVER INSURANCE.
Diversification Opportunities for GREENX METALS and HANOVER INSURANCE
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GREENX and HANOVER is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and GREENX METALS 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 GREENX METALS LTD 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 GREENX METALS i.e., GREENX METALS and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between GREENX METALS and HANOVER INSURANCE
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 3.71 times more return on investment than HANOVER INSURANCE. However, GREENX METALS is 3.71 times more volatile than HANOVER INSURANCE. It trades about 0.1 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about -0.2 per unit of risk. If you would invest 37.00 in GREENX METALS LTD on September 25, 2024 and sell it today you would earn a total of 3.00 from holding GREENX METALS LTD or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. HANOVER INSURANCE
Performance |
| Timeline |
| GREENX METALS LTD |
| HANOVER INSURANCE |
GREENX METALS and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and HANOVER INSURANCE
The main advantage of trading using opposite GREENX METALS and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS 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.| GREENX METALS vs. CORONGLRES CDIS101 | GREENX METALS vs. MONGOLIAN MINING CRPREGS | GREENX METALS vs. PERENNIAL ENERGY HD 01 | GREENX METALS vs. AJ LUCAS GROUP |
| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Microsoft | HANOVER INSURANCE vs. Microsoft |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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