Correlation Between HANOVER INSURANCE and NIGHTINGALE HEALTH
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and NIGHTINGALE HEALTH 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 NIGHTINGALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and NIGHTINGALE HEALTH EO, you can compare the effects of market volatilities on HANOVER INSURANCE and NIGHTINGALE HEALTH 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 NIGHTINGALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and NIGHTINGALE HEALTH.
Diversification Opportunities for HANOVER INSURANCE and NIGHTINGALE HEALTH
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HANOVER and NIGHTINGALE is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and NIGHTINGALE HEALTH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGHTINGALE HEALTH 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 NIGHTINGALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIGHTINGALE HEALTH has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and NIGHTINGALE HEALTH go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and NIGHTINGALE HEALTH
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to under-perform the NIGHTINGALE HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, HANOVER INSURANCE is 1.9 times less risky than NIGHTINGALE HEALTH. The stock trades about -0.02 of its potential returns per unit of risk. The NIGHTINGALE HEALTH EO is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 276.00 in NIGHTINGALE HEALTH EO on October 29, 2024 and sell it today you would earn a total of 21.00 from holding NIGHTINGALE HEALTH EO or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. NIGHTINGALE HEALTH EO
Performance |
| Timeline |
| HANOVER INSURANCE |
| NIGHTINGALE HEALTH |
HANOVER INSURANCE and NIGHTINGALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and NIGHTINGALE HEALTH
The main advantage of trading using opposite HANOVER INSURANCE and NIGHTINGALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, NIGHTINGALE HEALTH 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 NIGHTINGALE HEALTH will offset losses from the drop in NIGHTINGALE HEALTH's long position.| HANOVER INSURANCE vs. SCANSOURCE | HANOVER INSURANCE vs. Ubisoft Entertainment SA | HANOVER INSURANCE vs. RCS MediaGroup SpA | HANOVER INSURANCE vs. TRAVEL LEISURE DL 01 |
| NIGHTINGALE HEALTH vs. Synovus Financial Corp | NIGHTINGALE HEALTH vs. Ameriprise Financial | NIGHTINGALE HEALTH vs. Virtu Financial | NIGHTINGALE HEALTH vs. X FAB Silicon Foundries |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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