Correlation Between Hanover Insurance and CTP NV
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and CTP NV 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 CTP NV 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 CTP NV EO, you can compare the effects of market volatilities on Hanover Insurance and CTP NV 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 CTP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and CTP NV.
Diversification Opportunities for Hanover Insurance and CTP NV
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanover and CTP is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and CTP NV EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV EO 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 CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV EO has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and CTP NV go up and down completely randomly.
Pair Corralation between Hanover Insurance and CTP NV
Assuming the 90 days horizon Hanover Insurance is expected to generate 6.29 times less return on investment than CTP NV. But when comparing it to its historical volatility, The Hanover Insurance is 1.01 times less risky than CTP NV. It trades about 0.03 of its potential returns per unit of risk. CTP NV EO is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,482 in CTP NV EO on November 7, 2024 and sell it today you would earn a total of 98.00 from holding CTP NV EO or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
The Hanover Insurance vs. CTP NV EO
Performance |
| Timeline |
| Hanover Insurance |
| CTP NV EO |
Hanover Insurance and CTP NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and CTP NV
The main advantage of trading using opposite Hanover Insurance and CTP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, CTP NV 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 CTP NV will offset losses from the drop in CTP NV's long position.| Hanover Insurance vs. Daido Steel Co | Hanover Insurance vs. BG Foods | Hanover Insurance vs. AeroVironment | Hanover Insurance vs. United States Steel |
| CTP NV vs. SALESFORCE INC CDR | CTP NV vs. De Grey Mining | CTP NV vs. CANON MARKETING JP | CTP NV vs. BRIT AMER TOBACCO |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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