Correlation Between Gestamp Automocin and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Gestamp Automocin 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 Gestamp Automocin and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gestamp Automocin SA and The Hanover Insurance, you can compare the effects of market volatilities on Gestamp Automocin 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 Gestamp Automocin with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gestamp Automocin and Hanover Insurance.
Diversification Opportunities for Gestamp Automocin and Hanover Insurance
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gestamp and Hanover is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gestamp Automocin SA and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Gestamp Automocin 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 Gestamp Automocin SA 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 Gestamp Automocin i.e., Gestamp Automocin and Hanover Insurance go up and down completely randomly.
Pair Corralation between Gestamp Automocin and Hanover Insurance
Assuming the 90 days trading horizon Gestamp Automocin SA is expected to under-perform the Hanover Insurance. In addition to that, Gestamp Automocin is 1.57 times more volatile than The Hanover Insurance. It trades about -0.06 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about 0.09 per unit of volatility. If you would invest 9,736 in The Hanover Insurance on September 12, 2024 and sell it today you would earn a total of 5,264 from holding The Hanover Insurance or generate 54.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Gestamp Automocin SA vs. The Hanover Insurance
Performance |
| Timeline |
| Gestamp Automocin |
| Hanover Insurance |
Gestamp Automocin and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gestamp Automocin and Hanover Insurance
The main advantage of trading using opposite Gestamp Automocin and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gestamp Automocin 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.| Gestamp Automocin vs. The Hanover Insurance | Gestamp Automocin vs. Zurich Insurance Group | Gestamp Automocin vs. PLAYSTUDIOS A DL 0001 | Gestamp Automocin vs. MSAD INSURANCE |
| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. ZhongAn Online P |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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