Correlation Between HANOVER INSURANCE and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and X-FAB Silicon 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 X-FAB Silicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and X FAB Silicon Foundries, you can compare the effects of market volatilities on HANOVER INSURANCE and X-FAB Silicon 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 X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and X-FAB Silicon.
Diversification Opportunities for HANOVER INSURANCE and X-FAB Silicon
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between HANOVER and X-FAB is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X-FAB Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and X-FAB Silicon go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and X-FAB Silicon
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 1.31 times less return on investment than X-FAB Silicon. But when comparing it to its historical volatility, HANOVER INSURANCE is 1.54 times less risky than X-FAB Silicon. It trades about 0.03 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 493.00 in X FAB Silicon Foundries on November 4, 2024 and sell it today you would earn a total of 3.00 from holding X FAB Silicon Foundries or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANOVER INSURANCE vs. X FAB Silicon Foundries
Performance |
| Timeline |
| HANOVER INSURANCE |
| X FAB Silicon |
HANOVER INSURANCE and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and X-FAB Silicon
The main advantage of trading using opposite HANOVER INSURANCE and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, X-FAB Silicon 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 X-FAB Silicon will offset losses from the drop in X-FAB Silicon's long position.| HANOVER INSURANCE vs. Singapore Airlines Limited | HANOVER INSURANCE vs. SOUTHWEST AIRLINES | HANOVER INSURANCE vs. Southwest Airlines Co | HANOVER INSURANCE vs. ASURE SOFTWARE |
| X-FAB Silicon vs. Ross Stores | X-FAB Silicon vs. Burlington Stores | X-FAB Silicon vs. RETAIL FOOD GROUP | X-FAB Silicon vs. Australian Agricultural |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |