Correlation Between PKSHA TECHNOLOGY and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PKSHA TECHNOLOGY INC and HANOVER INSURANCE, you can compare the effects of market volatilities on PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and HANOVER INSURANCE.
Diversification Opportunities for PKSHA TECHNOLOGY and HANOVER INSURANCE
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PKSHA and HANOVER is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC 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 PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and HANOVER INSURANCE
Assuming the 90 days horizon PKSHA TECHNOLOGY is expected to generate 2.27 times less return on investment than HANOVER INSURANCE. In addition to that, PKSHA TECHNOLOGY is 2.14 times more volatile than HANOVER INSURANCE. It trades about 0.02 of its total potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.12 per unit of volatility. If you would invest 13,219 in HANOVER INSURANCE on October 14, 2024 and sell it today you would earn a total of 1,381 from holding HANOVER INSURANCE or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. HANOVER INSURANCE
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| HANOVER INSURANCE |
PKSHA TECHNOLOGY and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and HANOVER INSURANCE
The main advantage of trading using opposite PKSHA TECHNOLOGY and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY 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.| PKSHA TECHNOLOGY vs. Merit Medical Systems | PKSHA TECHNOLOGY vs. Cairo Communication SpA | PKSHA TECHNOLOGY vs. China Communications Services | PKSHA TECHNOLOGY vs. SK TELECOM TDADR |
| HANOVER INSURANCE vs. ANTA SPORTS PRODUCT | HANOVER INSURANCE vs. Alfa Financial Software | HANOVER INSURANCE vs. SIERRA METALS | HANOVER INSURANCE vs. PKSHA TECHNOLOGY 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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