Correlation Between Alfa Financial and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and HANOVER INSURANCE, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and HANOVER INSURANCE.
Diversification Opportunities for Alfa Financial and HANOVER INSURANCE
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alfa and HANOVER is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between Alfa Financial and HANOVER INSURANCE
Assuming the 90 days trading horizon Alfa Financial Software is expected to under-perform the HANOVER INSURANCE. In addition to that, Alfa Financial is 1.28 times more volatile than HANOVER INSURANCE. It trades about -0.15 of its total potential returns per unit of risk. HANOVER INSURANCE is currently generating about -0.07 per unit of volatility. If you would invest 15,107 in HANOVER INSURANCE on October 28, 2024 and sell it today you would lose (607.00) from holding HANOVER INSURANCE or give up 4.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. HANOVER INSURANCE
Performance |
| Timeline |
| Alfa Financial Software |
| HANOVER INSURANCE |
Alfa Financial and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and HANOVER INSURANCE
The main advantage of trading using opposite Alfa Financial and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc |
| HANOVER INSURANCE vs. Playa Hotels Resorts | HANOVER INSURANCE vs. Salesforce | HANOVER INSURANCE vs. JAPAN TOBACCO UNSPADR12 | HANOVER INSURANCE vs. SALESFORCE INC CDR |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |