Correlation Between HANOVER INSURANCE and YASKAWA ELEC
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and YASKAWA ELEC 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 YASKAWA ELEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and YASKAWA ELEC UNSP, you can compare the effects of market volatilities on HANOVER INSURANCE and YASKAWA ELEC 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 YASKAWA ELEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and YASKAWA ELEC.
Diversification Opportunities for HANOVER INSURANCE and YASKAWA ELEC
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HANOVER and YASKAWA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and YASKAWA ELEC UNSP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YASKAWA ELEC UNSP 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 YASKAWA ELEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YASKAWA ELEC UNSP has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and YASKAWA ELEC go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and YASKAWA ELEC
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 11.16 times less return on investment than YASKAWA ELEC. But when comparing it to its historical volatility, HANOVER INSURANCE is 1.58 times less risky than YASKAWA ELEC. It trades about 0.06 of its potential returns per unit of risk. YASKAWA ELEC UNSP is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 4,660 in YASKAWA ELEC UNSP on October 25, 2024 and sell it today you would earn a total of 840.00 from holding YASKAWA ELEC UNSP or generate 18.03% 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. YASKAWA ELEC UNSP
Performance |
| Timeline |
| HANOVER INSURANCE |
| YASKAWA ELEC UNSP |
HANOVER INSURANCE and YASKAWA ELEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANOVER INSURANCE and YASKAWA ELEC
The main advantage of trading using opposite HANOVER INSURANCE and YASKAWA ELEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, YASKAWA ELEC 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 YASKAWA ELEC will offset losses from the drop in YASKAWA ELEC's long position.| HANOVER INSURANCE vs. Guangdong Investment Limited | HANOVER INSURANCE vs. HK Electric Investments | HANOVER INSURANCE vs. MidCap Financial Investment | HANOVER INSURANCE vs. Axway Software SA |
| YASKAWA ELEC vs. Siamgas And Petrochemicals | YASKAWA ELEC vs. TRI CHEMICAL LABORATINC | YASKAWA ELEC vs. International Consolidated Airlines | YASKAWA ELEC vs. PTT Global Chemical |
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.
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