Correlation Between HANOVER INSURANCE and China Mobile
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and China Mobile 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 China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and China Life Insurance, you can compare the effects of market volatilities on HANOVER INSURANCE and China Mobile 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 China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and China Mobile.
Diversification Opportunities for HANOVER INSURANCE and China Mobile
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between HANOVER and China is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance 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 China Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and China Mobile go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and China Mobile
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 1.07 times more return on investment than China Mobile. However, HANOVER INSURANCE is 1.07 times more volatile than China Life Insurance. It trades about 0.08 of its potential returns per unit of risk. China Life Insurance is currently generating about -0.18 per unit of risk. If you would invest 14,600 in HANOVER INSURANCE on October 24, 2024 and sell it today you would earn a total of 300.00 from holding HANOVER INSURANCE or generate 2.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
HANOVER INSURANCE vs. China Life Insurance
Performance |
Timeline |
HANOVER INSURANCE |
China Life Insurance |
HANOVER INSURANCE and China Mobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HANOVER INSURANCE and China Mobile
The main advantage of trading using opposite HANOVER INSURANCE and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, China Mobile 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 China Mobile will offset losses from the drop in China Mobile's long position.HANOVER INSURANCE vs. NH HOTEL GROUP | HANOVER INSURANCE vs. ScanSource | HANOVER INSURANCE vs. BRIT AMER TOBACCO | HANOVER INSURANCE vs. BORR DRILLING NEW |
China Mobile vs. Ping An Insurance | China Mobile vs. AIA Group Limited | China Mobile vs. MetLife | China Mobile vs. Prudential 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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