Correlation Between HANOVER INSURANCE and Tradegate
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and Tradegate 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 Tradegate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on HANOVER INSURANCE and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and Tradegate.
Diversification Opportunities for HANOVER INSURANCE and Tradegate
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HANOVER and Tradegate is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and Tradegate go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and Tradegate
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 1.25 times more return on investment than Tradegate. However, HANOVER INSURANCE is 1.25 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about 0.03 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about -0.03 per unit of risk. If you would invest 12,372 in HANOVER INSURANCE on October 28, 2024 and sell it today you would earn a total of 2,128 from holding HANOVER INSURANCE or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| HANOVER INSURANCE |
| Tradegate AG Wertpap |
HANOVER INSURANCE and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and Tradegate
The main advantage of trading using opposite HANOVER INSURANCE and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.| HANOVER INSURANCE vs. Playa Hotels Resorts | HANOVER INSURANCE vs. Salesforce | HANOVER INSURANCE vs. JAPAN TOBACCO UNSPADR12 | HANOVER INSURANCE vs. SALESFORCE INC CDR |
| Tradegate vs. Lendlease Group | Tradegate vs. NEWELL RUBBERMAID | Tradegate vs. Martin Marietta Materials | Tradegate vs. LOANDEPOT INC A |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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