Correlation Between HANOVER INSURANCE and Mizuho Financial
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and Mizuho Financial 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 Mizuho Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and Mizuho Financial Group, you can compare the effects of market volatilities on HANOVER INSURANCE and Mizuho Financial 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 Mizuho Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and Mizuho Financial.
Diversification Opportunities for HANOVER INSURANCE and Mizuho Financial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HANOVER and Mizuho is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and Mizuho Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizuho Financial 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 Mizuho Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mizuho Financial has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and Mizuho Financial go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and Mizuho Financial
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to under-perform the Mizuho Financial. But the stock apears to be less risky and, when comparing its historical volatility, HANOVER INSURANCE is 1.8 times less risky than Mizuho Financial. The stock trades about -0.07 of its potential returns per unit of risk. The Mizuho Financial Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,113 in Mizuho Financial Group on September 13, 2024 and sell it today you would earn a total of 250.00 from holding Mizuho Financial Group or generate 11.83% 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. Mizuho Financial Group
Performance |
| Timeline |
| HANOVER INSURANCE |
| Mizuho Financial |
HANOVER INSURANCE and Mizuho Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and Mizuho Financial
The main advantage of trading using opposite HANOVER INSURANCE and Mizuho Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, Mizuho Financial 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 Mizuho Financial will offset losses from the drop in Mizuho Financial's long position.| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc |
| Mizuho Financial vs. Playtech plc | Mizuho Financial vs. United States Steel | Mizuho Financial vs. Columbia Sportswear | Mizuho Financial vs. KOOL2PLAY SA ZY |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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