Correlation Between Hanover Insurance and Siamgas
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Siamgas 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 Siamgas 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 Siamgas And Petrochemicals, you can compare the effects of market volatilities on Hanover Insurance and Siamgas 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 Siamgas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Siamgas.
Diversification Opportunities for Hanover Insurance and Siamgas
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hanover and Siamgas is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche 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 Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Siamgas go up and down completely randomly.
Pair Corralation between Hanover Insurance and Siamgas
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.57 times more return on investment than Siamgas. However, The Hanover Insurance is 1.74 times less risky than Siamgas. It trades about 0.38 of its potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.01 per unit of risk. If you would invest 13,700 in The Hanover Insurance on September 1, 2024 and sell it today you would earn a total of 2,100 from holding The Hanover Insurance or generate 15.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Siamgas And Petrochemicals
Performance |
| Timeline |
| Hanover Insurance |
| Siamgas And Petroche |
Hanover Insurance and Siamgas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Siamgas
The main advantage of trading using opposite Hanover Insurance and Siamgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Siamgas 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 Siamgas will offset losses from the drop in Siamgas' long position.| Hanover Insurance vs. National Beverage Corp | Hanover Insurance vs. United Breweries Co | Hanover Insurance vs. Sabra Health Care | Hanover Insurance vs. Clearside Biomedical |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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