Correlation Between HANOVER INSURANCE and CME
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and CME 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 CME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and CME Group, you can compare the effects of market volatilities on HANOVER INSURANCE and CME 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 CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and CME.
Diversification Opportunities for HANOVER INSURANCE and CME
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HANOVER and CME is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME Group 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 CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and CME go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and CME
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 1.16 times more return on investment than CME. However, HANOVER INSURANCE is 1.16 times more volatile than CME Group. It trades about 0.1 of its potential returns per unit of risk. CME Group is currently generating about 0.07 per unit of risk. If you would invest 10,398 in HANOVER INSURANCE on September 14, 2024 and sell it today you would earn a total of 4,302 from holding HANOVER INSURANCE or generate 41.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. CME Group
Performance |
| Timeline |
| HANOVER INSURANCE |
| CME Group |
HANOVER INSURANCE and CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and CME
The main advantage of trading using opposite HANOVER INSURANCE and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, CME 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 CME will offset losses from the drop in CME's long position.| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |