Correlation Between Hanover Insurance and MSAD INSURANCE
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and MSAD INSURANCE 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 MSAD INSURANCE 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 MSAD INSURANCE, you can compare the effects of market volatilities on Hanover Insurance and MSAD INSURANCE 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 MSAD INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and MSAD INSURANCE.
Diversification Opportunities for Hanover Insurance and MSAD INSURANCE
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanover and MSAD is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and MSAD INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSAD INSURANCE 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 MSAD INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSAD INSURANCE has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and MSAD INSURANCE go up and down completely randomly.
Pair Corralation between Hanover Insurance and MSAD INSURANCE
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.87 times more return on investment than MSAD INSURANCE. However, The Hanover Insurance is 1.15 times less risky than MSAD INSURANCE. It trades about -0.12 of its potential returns per unit of risk. MSAD INSURANCE is currently generating about -0.11 per unit of risk. If you would invest 15,100 in The Hanover Insurance on September 13, 2024 and sell it today you would lose (500.00) from holding The Hanover Insurance or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Hanover Insurance vs. MSAD INSURANCE
Performance |
| Timeline |
| Hanover Insurance |
| MSAD INSURANCE |
Hanover Insurance and MSAD INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and MSAD INSURANCE
The main advantage of trading using opposite Hanover Insurance and MSAD INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, MSAD INSURANCE 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 MSAD INSURANCE will offset losses from the drop in MSAD INSURANCE's long position.| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. ZhongAn Online P |
| MSAD INSURANCE vs. Luckin Coffee | MSAD INSURANCE vs. ScanSource | MSAD INSURANCE vs. Hanison Construction Holdings | MSAD INSURANCE vs. United Breweries Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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