Correlation Between HANOVER INSURANCE and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and SBI Insurance 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 SBI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and SBI Insurance Group, you can compare the effects of market volatilities on HANOVER INSURANCE and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and SBI Insurance.
Diversification Opportunities for HANOVER INSURANCE and SBI Insurance
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between HANOVER and SBI is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and SBI Insurance go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and SBI Insurance
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 1.07 times more return on investment than SBI Insurance. However, HANOVER INSURANCE is 1.07 times more volatile than SBI Insurance Group. It trades about 0.43 of its potential returns per unit of risk. SBI Insurance Group is currently generating about 0.3 per unit of risk. If you would invest 13,500 in HANOVER INSURANCE on August 27, 2024 and sell it today you would earn a total of 2,000 from holding HANOVER INSURANCE or generate 14.81% 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. SBI Insurance Group
Performance |
| Timeline |
| HANOVER INSURANCE |
| SBI Insurance Group |
HANOVER INSURANCE and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and SBI Insurance
The main advantage of trading using opposite HANOVER INSURANCE and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| HANOVER INSURANCE vs. CHINA TONTINE WINES | HANOVER INSURANCE vs. Computer And Technologies | HANOVER INSURANCE vs. Media and Games | HANOVER INSURANCE vs. Computershare Limited |
| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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