Correlation Between HANOVER INSURANCE and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and Goldman Sachs 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 Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and The Goldman Sachs, you can compare the effects of market volatilities on HANOVER INSURANCE and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and Goldman Sachs.
Diversification Opportunities for HANOVER INSURANCE and Goldman Sachs
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HANOVER and Goldman is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and Goldman Sachs go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and Goldman Sachs
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 1.59 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, HANOVER INSURANCE is 2.22 times less risky than Goldman Sachs. It trades about 0.36 of its potential returns per unit of risk. The Goldman Sachs is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 47,785 in The Goldman Sachs on September 1, 2024 and sell it today you would earn a total of 10,145 from holding The Goldman Sachs or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. The Goldman Sachs
Performance |
| Timeline |
| HANOVER INSURANCE |
| Goldman Sachs |
HANOVER INSURANCE and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and Goldman Sachs
The main advantage of trading using opposite HANOVER INSURANCE and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| HANOVER INSURANCE vs. SIVERS SEMICONDUCTORS AB | HANOVER INSURANCE vs. Darden Restaurants | HANOVER INSURANCE vs. Reliance Steel Aluminum | HANOVER INSURANCE vs. Q2M Managementberatung AG |
| Goldman Sachs vs. H FARM SPA | Goldman Sachs vs. United Insurance Holdings | Goldman Sachs vs. HANOVER INSURANCE | Goldman Sachs vs. Selective Insurance Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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