Correlation Between HANOVER INSURANCE and ITOCHU
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and ITOCHU 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 ITOCHU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and ITOCHU, you can compare the effects of market volatilities on HANOVER INSURANCE and ITOCHU 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 ITOCHU. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and ITOCHU.
Diversification Opportunities for HANOVER INSURANCE and ITOCHU
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between HANOVER and ITOCHU is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and ITOCHU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITOCHU 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 ITOCHU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITOCHU has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and ITOCHU go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and ITOCHU
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 2.38 times less return on investment than ITOCHU. But when comparing it to its historical volatility, HANOVER INSURANCE is 1.27 times less risky than ITOCHU. It trades about 0.03 of its potential returns per unit of risk. ITOCHU is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,991 in ITOCHU on September 16, 2024 and sell it today you would earn a total of 1,809 from holding ITOCHU or generate 60.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
HANOVER INSURANCE vs. ITOCHU
Performance |
| Timeline |
| HANOVER INSURANCE |
| ITOCHU |
HANOVER INSURANCE and ITOCHU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and ITOCHU
The main advantage of trading using opposite HANOVER INSURANCE and ITOCHU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, ITOCHU 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 ITOCHU will offset losses from the drop in ITOCHU's long position.| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc |
| ITOCHU vs. AGF Management Limited | ITOCHU vs. HANOVER INSURANCE | ITOCHU vs. Brockhaus Capital Management | ITOCHU vs. Reinsurance Group of |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |