Correlation Between Hanover Insurance and CREO MEDICAL
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and CREO MEDICAL 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 CREO MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hanover Insurance and CREO MEDICAL GRP, you can compare the effects of market volatilities on Hanover Insurance and CREO MEDICAL 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 CREO MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and CREO MEDICAL.
Diversification Opportunities for Hanover Insurance and CREO MEDICAL
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanover and CREO is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and CREO MEDICAL GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREO MEDICAL GRP 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 The Hanover Insurance are associated (or correlated) with CREO MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CREO MEDICAL GRP has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and CREO MEDICAL go up and down completely randomly.
Pair Corralation between Hanover Insurance and CREO MEDICAL
Assuming the 90 days horizon The Hanover Insurance is expected to under-perform the CREO MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, The Hanover Insurance is 4.11 times less risky than CREO MEDICAL. The stock trades about -0.08 of its potential returns per unit of risk. The CREO MEDICAL GRP is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20.00 in CREO MEDICAL GRP on October 17, 2024 and sell it today you would earn a total of 1.00 from holding CREO MEDICAL GRP or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. CREO MEDICAL GRP
Performance |
| Timeline |
| Hanover Insurance |
| CREO MEDICAL GRP |
Hanover Insurance and CREO MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and CREO MEDICAL
The main advantage of trading using opposite Hanover Insurance and CREO MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, CREO MEDICAL 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 CREO MEDICAL will offset losses from the drop in CREO MEDICAL's long position.| Hanover Insurance vs. Tokio Marine Holdings | Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. Loews Corp |
| CREO MEDICAL vs. Fair Isaac Corp | CREO MEDICAL vs. Corsair Gaming | CREO MEDICAL vs. Direct Line Insurance | CREO MEDICAL vs. The Hanover Insurance |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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