Correlation Between HANOVER INSURANCE and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and Fevertree Drinks 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 Fevertree Drinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and Fevertree Drinks PLC, you can compare the effects of market volatilities on HANOVER INSURANCE and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and Fevertree Drinks.
Diversification Opportunities for HANOVER INSURANCE and Fevertree Drinks
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HANOVER and Fevertree is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and Fevertree Drinks PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks PLC 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks PLC has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and Fevertree Drinks go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and Fevertree Drinks
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to under-perform the Fevertree Drinks. But the stock apears to be less risky and, when comparing its historical volatility, HANOVER INSURANCE is 1.71 times less risky than Fevertree Drinks. The stock trades about -0.2 of its potential returns per unit of risk. The Fevertree Drinks PLC is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 825.00 in Fevertree Drinks PLC on September 24, 2024 and sell it today you would lose (25.00) from holding Fevertree Drinks PLC or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. Fevertree Drinks PLC
Performance |
| Timeline |
| HANOVER INSURANCE |
| Fevertree Drinks PLC |
HANOVER INSURANCE and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and Fevertree Drinks
The main advantage of trading using opposite HANOVER INSURANCE and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| HANOVER INSURANCE vs. Aluminum of | HANOVER INSURANCE vs. Singapore Telecommunications Limited | HANOVER INSURANCE vs. QURATE RETAIL INC | HANOVER INSURANCE vs. Ross Stores |
| Fevertree Drinks vs. HANOVER INSURANCE | Fevertree Drinks vs. INSURANCE AUST GRP | Fevertree Drinks vs. Selective Insurance Group | Fevertree Drinks vs. SHIN ETSU CHEMICAL |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |