Correlation Between HANOVER INSURANCE and WAGNERS HOLDING
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and WAGNERS HOLDING 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 HANOVER INSURANCE and WAGNERS HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and WAGNERS HOLDING LTD, you can compare the effects of market volatilities on HANOVER INSURANCE and WAGNERS HOLDING 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 HANOVER INSURANCE with a short position of WAGNERS HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and WAGNERS HOLDING.
Diversification Opportunities for HANOVER INSURANCE and WAGNERS HOLDING
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HANOVER and WAGNERS is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and WAGNERS HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAGNERS HOLDING LTD and HANOVER INSURANCE 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 HANOVER INSURANCE are associated (or correlated) with WAGNERS HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAGNERS HOLDING LTD has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and WAGNERS HOLDING go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and WAGNERS HOLDING
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to under-perform the WAGNERS HOLDING. But the stock apears to be less risky and, when comparing its historical volatility, HANOVER INSURANCE is 3.12 times less risky than WAGNERS HOLDING. The stock trades about -0.11 of its potential returns per unit of risk. The WAGNERS HOLDING LTD is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 83.00 in WAGNERS HOLDING LTD on September 27, 2024 and sell it today you would lose (1.00) from holding WAGNERS HOLDING LTD or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. WAGNERS HOLDING LTD
Performance |
| Timeline |
| HANOVER INSURANCE |
| WAGNERS HOLDING LTD |
HANOVER INSURANCE and WAGNERS HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and WAGNERS HOLDING
The main advantage of trading using opposite HANOVER INSURANCE and WAGNERS HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, WAGNERS HOLDING 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 WAGNERS HOLDING will offset losses from the drop in WAGNERS HOLDING's long position.| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Microsoft | HANOVER INSURANCE vs. Microsoft |
| WAGNERS HOLDING vs. Tencent Music Entertainment | WAGNERS HOLDING vs. GAMING FAC SA | WAGNERS HOLDING vs. Seven West Media | WAGNERS HOLDING vs. Live Nation Entertainment |
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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