Correlation Between HANOVER INSURANCE and FOX CORP
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and FOX CORP 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 FOX CORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and FOX P B, you can compare the effects of market volatilities on HANOVER INSURANCE and FOX CORP 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 FOX CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and FOX CORP.
Diversification Opportunities for HANOVER INSURANCE and FOX CORP
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HANOVER and FOX is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and FOX P B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOX CORP 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 FOX CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOX CORP has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and FOX CORP go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and FOX CORP
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 1.71 times less return on investment than FOX CORP. But when comparing it to its historical volatility, HANOVER INSURANCE is 1.1 times less risky than FOX CORP. It trades about 0.13 of its potential returns per unit of risk. FOX P B is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,380 in FOX P B on December 4, 2024 and sell it today you would earn a total of 1,670 from holding FOX P B or generate 49.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. FOX P B
Performance |
| Timeline |
| HANOVER INSURANCE |
| FOX CORP |
HANOVER INSURANCE and FOX CORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and FOX CORP
The main advantage of trading using opposite HANOVER INSURANCE and FOX CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, FOX CORP 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 FOX CORP will offset losses from the drop in FOX CORP's long position.| HANOVER INSURANCE vs. CN MODERN DAIRY | HANOVER INSURANCE vs. Cairo Communication SpA | HANOVER INSURANCE vs. COMPUTERSHARE | HANOVER INSURANCE vs. China Communications Construction |
| FOX CORP vs. LOANDEPOT INC A | FOX CORP vs. INTERSHOP Communications Aktiengesellschaft | FOX CORP vs. Lendlease Group | FOX CORP vs. SmarTone Telecommunications Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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