Correlation Between HANOVER INSURANCE and Corporate Office
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and Corporate Office 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 Corporate Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and Corporate Office Properties, you can compare the effects of market volatilities on HANOVER INSURANCE and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and Corporate Office.
Diversification Opportunities for HANOVER INSURANCE and Corporate Office
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HANOVER and Corporate is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and Corporate Office go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and Corporate Office
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 1.32 times less return on investment than Corporate Office. In addition to that, HANOVER INSURANCE is 1.13 times more volatile than Corporate Office Properties. It trades about 0.12 of its total potential returns per unit of risk. Corporate Office Properties is currently generating about 0.18 per unit of volatility. If you would invest 2,187 in Corporate Office Properties on August 28, 2024 and sell it today you would earn a total of 853.00 from holding Corporate Office Properties or generate 39.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. Corporate Office Properties
Performance |
| Timeline |
| HANOVER INSURANCE |
| Corporate Office Pro |
HANOVER INSURANCE and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and Corporate Office
The main advantage of trading using opposite HANOVER INSURANCE and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Microsoft | HANOVER INSURANCE vs. Microsoft |
| Corporate Office vs. Superior Plus Corp | Corporate Office vs. NMI Holdings | Corporate Office vs. Origin Agritech | Corporate Office vs. SIVERS SEMICONDUCTORS AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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