Correlation Between HANOVER INSURANCE and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and VARIOUS EATERIES 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 VARIOUS EATERIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and VARIOUS EATERIES LS, you can compare the effects of market volatilities on HANOVER INSURANCE and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and VARIOUS EATERIES.
Diversification Opportunities for HANOVER INSURANCE and VARIOUS EATERIES
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between HANOVER and VARIOUS is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and VARIOUS EATERIES
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 0.97 times more return on investment than VARIOUS EATERIES. However, HANOVER INSURANCE is 1.03 times less risky than VARIOUS EATERIES. It trades about 0.14 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about -0.1 per unit of risk. If you would invest 12,920 in HANOVER INSURANCE on September 22, 2024 and sell it today you would earn a total of 1,680 from holding HANOVER INSURANCE or generate 13.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| HANOVER INSURANCE |
| VARIOUS EATERIES |
HANOVER INSURANCE and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and VARIOUS EATERIES
The main advantage of trading using opposite HANOVER INSURANCE and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| HANOVER INSURANCE vs. G III Apparel Group | HANOVER INSURANCE vs. American Eagle Outfitters | HANOVER INSURANCE vs. TFS FINANCIAL | HANOVER INSURANCE vs. URBAN OUTFITTERS |
| VARIOUS EATERIES vs. McDonalds | VARIOUS EATERIES vs. Starbucks | VARIOUS EATERIES vs. Starbucks | VARIOUS EATERIES vs. Compass Group PLC |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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