Correlation Between HANOVER INSURANCE and Intel
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and Intel, you can compare the effects of market volatilities on HANOVER INSURANCE and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and Intel.
Diversification Opportunities for HANOVER INSURANCE and Intel
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HANOVER and Intel is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and Intel go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and Intel
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 0.41 times more return on investment than Intel. However, HANOVER INSURANCE is 2.43 times less risky than Intel. It trades about 0.09 of its potential returns per unit of risk. Intel is currently generating about -0.07 per unit of risk. If you would invest 10,964 in HANOVER INSURANCE on September 14, 2024 and sell it today you would earn a total of 3,736 from holding HANOVER INSURANCE or generate 34.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. Intel
Performance |
| Timeline |
| HANOVER INSURANCE |
| Intel |
HANOVER INSURANCE and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and Intel
The main advantage of trading using opposite HANOVER INSURANCE and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc |
| Intel vs. China Communications Services | Intel vs. THORNEY TECHS LTD | Intel vs. ACCSYS TECHPLC EO | Intel vs. FARO Technologies |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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