Correlation Between Hanover Insurance and BRAEMAR HOTELS
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and BRAEMAR HOTELS 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 BRAEMAR HOTELS 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 BRAEMAR HOTELS RES, you can compare the effects of market volatilities on Hanover Insurance and BRAEMAR HOTELS 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 BRAEMAR HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and BRAEMAR HOTELS.
Diversification Opportunities for Hanover Insurance and BRAEMAR HOTELS
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanover and BRAEMAR is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and BRAEMAR HOTELS RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAEMAR HOTELS RES 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 BRAEMAR HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAEMAR HOTELS RES has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and BRAEMAR HOTELS go up and down completely randomly.
Pair Corralation between Hanover Insurance and BRAEMAR HOTELS
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.48 times more return on investment than BRAEMAR HOTELS. However, The Hanover Insurance is 2.07 times less risky than BRAEMAR HOTELS. It trades about 0.03 of its potential returns per unit of risk. BRAEMAR HOTELS RES is currently generating about -0.36 per unit of risk. If you would invest 14,800 in The Hanover Insurance on October 25, 2024 and sell it today you would earn a total of 100.00 from holding The Hanover Insurance or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. BRAEMAR HOTELS RES
Performance |
| Timeline |
| Hanover Insurance |
| BRAEMAR HOTELS RES |
Hanover Insurance and BRAEMAR HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and BRAEMAR HOTELS
The main advantage of trading using opposite Hanover Insurance and BRAEMAR HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, BRAEMAR HOTELS 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 BRAEMAR HOTELS will offset losses from the drop in BRAEMAR HOTELS's long position.| Hanover Insurance vs. Northern Data AG | Hanover Insurance vs. SILVER BULLET DATA | Hanover Insurance vs. Information Services International Dentsu | Hanover Insurance vs. Grupo Carso SAB |
| BRAEMAR HOTELS vs. Sotherly Hotels | BRAEMAR HOTELS vs. Superior Plus Corp | BRAEMAR HOTELS vs. Origin Agritech | BRAEMAR HOTELS vs. Identiv |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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