Correlation Between HANOVER INSURANCE and Live Nation
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and Live Nation 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 Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and Live Nation Entertainment, you can compare the effects of market volatilities on HANOVER INSURANCE and Live Nation 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 Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and Live Nation.
Diversification Opportunities for HANOVER INSURANCE and Live Nation
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HANOVER and Live is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment 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 Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and Live Nation go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and Live Nation
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 1.31 times more return on investment than Live Nation. However, HANOVER INSURANCE is 1.31 times more volatile than Live Nation Entertainment. It trades about -0.02 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about -0.11 per unit of risk. If you would invest 14,709 in HANOVER INSURANCE on October 11, 2024 and sell it today you would lose (109.00) from holding HANOVER INSURANCE or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. Live Nation Entertainment
Performance |
| Timeline |
| HANOVER INSURANCE |
| Live Nation Entertainment |
HANOVER INSURANCE and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and Live Nation
The main advantage of trading using opposite HANOVER INSURANCE and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, Live Nation 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 Live Nation will offset losses from the drop in Live Nation's long position.| HANOVER INSURANCE vs. Singapore Telecommunications Limited | HANOVER INSURANCE vs. China Communications Services | HANOVER INSURANCE vs. Charter Communications | HANOVER INSURANCE vs. De Grey Mining |
| Live Nation vs. Direct Line Insurance | Live Nation vs. HANOVER INSURANCE | Live Nation vs. VIENNA INSURANCE GR | Live Nation vs. FAST RETAIL ADR |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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