Correlation Between HANOVER INSURANCE and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and Nordic Semiconductor 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 Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and Nordic Semiconductor ASA, you can compare the effects of market volatilities on HANOVER INSURANCE and Nordic Semiconductor 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 Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and Nordic Semiconductor.
Diversification Opportunities for HANOVER INSURANCE and Nordic Semiconductor
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HANOVER and Nordic is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and Nordic Semiconductor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Semiconductor ASA 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 Nordic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Semiconductor ASA has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and Nordic Semiconductor
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to under-perform the Nordic Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, HANOVER INSURANCE is 1.54 times less risky than Nordic Semiconductor. The stock trades about -0.03 of its potential returns per unit of risk. The Nordic Semiconductor ASA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 864.00 in Nordic Semiconductor ASA on October 11, 2024 and sell it today you would earn a total of 23.00 from holding Nordic Semiconductor ASA or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| HANOVER INSURANCE |
| Nordic Semiconductor ASA |
HANOVER INSURANCE and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and Nordic Semiconductor
The main advantage of trading using opposite HANOVER INSURANCE and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, Nordic Semiconductor 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 Nordic Semiconductor will offset losses from the drop in Nordic Semiconductor's long position.| HANOVER INSURANCE vs. NAGOYA RAILROAD | HANOVER INSURANCE vs. Broadcom | HANOVER INSURANCE vs. H2O Retailing | HANOVER INSURANCE vs. Fast Retailing Co |
| Nordic Semiconductor vs. HANOVER INSURANCE | Nordic Semiconductor vs. Ribbon Communications | Nordic Semiconductor vs. Reinsurance Group of | Nordic Semiconductor vs. Shenandoah Telecommunications |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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