Correlation Between HANOVER INSURANCE and Whirlpool
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and Whirlpool 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 Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and Whirlpool, you can compare the effects of market volatilities on HANOVER INSURANCE and Whirlpool 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 Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and Whirlpool.
Diversification Opportunities for HANOVER INSURANCE and Whirlpool
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HANOVER and Whirlpool is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool 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 Whirlpool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whirlpool has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and Whirlpool go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and Whirlpool
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 0.97 times more return on investment than Whirlpool. However, HANOVER INSURANCE is 1.03 times less risky than Whirlpool. It trades about 0.31 of its potential returns per unit of risk. Whirlpool is currently generating about -0.12 per unit of risk. If you would invest 14,600 in HANOVER INSURANCE on December 5, 2024 and sell it today you would earn a total of 1,800 from holding HANOVER INSURANCE or generate 12.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. Whirlpool
Performance |
| Timeline |
| HANOVER INSURANCE |
| Whirlpool |
HANOVER INSURANCE and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and Whirlpool
The main advantage of trading using opposite HANOVER INSURANCE and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, Whirlpool 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 Whirlpool will offset losses from the drop in Whirlpool's long position.| HANOVER INSURANCE vs. X FAB Silicon Foundries | HANOVER INSURANCE vs. Siamgas And Petrochemicals | HANOVER INSURANCE vs. SEKISUI CHEMICAL | HANOVER INSURANCE vs. CeoTronics AG |
| Whirlpool vs. SOUTHWEST AIRLINES | Whirlpool vs. Aegean Airlines SA | Whirlpool vs. GWILLI FOOD | Whirlpool vs. GURU ORGANIC ENERGY |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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