Correlation Between HANOVER INSURANCE and OTP Bank
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and OTP Bank 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 OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and OTP Bank Nyrt, you can compare the effects of market volatilities on HANOVER INSURANCE and OTP Bank 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 OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and OTP Bank.
Diversification Opportunities for HANOVER INSURANCE and OTP Bank
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HANOVER and OTP is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and OTP Bank Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OTP Bank Nyrt 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 OTP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OTP Bank Nyrt has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and OTP Bank go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and OTP Bank
If you would invest 14,700 in HANOVER INSURANCE on November 6, 2024 and sell it today you would earn a total of 100.00 from holding HANOVER INSURANCE or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
HANOVER INSURANCE vs. OTP Bank Nyrt
Performance |
| Timeline |
| HANOVER INSURANCE |
| OTP Bank Nyrt |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
HANOVER INSURANCE and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and OTP Bank
The main advantage of trading using opposite HANOVER INSURANCE and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, OTP Bank 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 OTP Bank will offset losses from the drop in OTP Bank's long position.| HANOVER INSURANCE vs. AUST AGRICULTURAL | HANOVER INSURANCE vs. Suntory Beverage Food | HANOVER INSURANCE vs. PREMIER FOODS | HANOVER INSURANCE vs. Tyson Foods |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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