Correlation Between HANOVER INSURANCE and QUEEN S
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and QUEEN S 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 QUEEN S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and QUEEN S ROAD, you can compare the effects of market volatilities on HANOVER INSURANCE and QUEEN S 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 QUEEN S. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and QUEEN S.
Diversification Opportunities for HANOVER INSURANCE and QUEEN S
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HANOVER and QUEEN is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and QUEEN S go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and QUEEN S
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 0.34 times more return on investment than QUEEN S. However, HANOVER INSURANCE is 2.95 times less risky than QUEEN S. It trades about 0.09 of its potential returns per unit of risk. QUEEN S ROAD is currently generating about 0.01 per unit of risk. If you would invest 11,845 in HANOVER INSURANCE on August 29, 2024 and sell it today you would earn a total of 3,255 from holding HANOVER INSURANCE or generate 27.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.53% |
| Values | Daily Returns |
HANOVER INSURANCE vs. QUEEN S ROAD
Performance |
| Timeline |
| HANOVER INSURANCE |
| QUEEN S ROAD |
HANOVER INSURANCE and QUEEN S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and QUEEN S
The main advantage of trading using opposite HANOVER INSURANCE and QUEEN S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, QUEEN S 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 QUEEN S will offset losses from the drop in QUEEN S's long position.| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Superior Plus Corp | HANOVER INSURANCE vs. SIVERS SEMICONDUCTORS AB |
| QUEEN S vs. BlackRock | QUEEN S vs. Ameriprise Financial | QUEEN S vs. Ares Management Corp | QUEEN S vs. Northern Trust |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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