Correlation Between Hanover Insurance and MEBUKI FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and MEBUKI FINANCIAL 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 MEBUKI FINANCIAL 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 MEBUKI FINANCIAL GROUP, you can compare the effects of market volatilities on Hanover Insurance and MEBUKI FINANCIAL 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 MEBUKI FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and MEBUKI FINANCIAL.
Diversification Opportunities for Hanover Insurance and MEBUKI FINANCIAL
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hanover and MEBUKI is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and MEBUKI FINANCIAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEBUKI FINANCIAL 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 MEBUKI FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEBUKI FINANCIAL has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and MEBUKI FINANCIAL go up and down completely randomly.
Pair Corralation between Hanover Insurance and MEBUKI FINANCIAL
Assuming the 90 days horizon Hanover Insurance is expected to generate 1.17 times less return on investment than MEBUKI FINANCIAL. But when comparing it to its historical volatility, The Hanover Insurance is 1.43 times less risky than MEBUKI FINANCIAL. It trades about 0.18 of its potential returns per unit of risk. MEBUKI FINANCIAL GROUP is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 346.00 in MEBUKI FINANCIAL GROUP on September 4, 2024 and sell it today you would earn a total of 72.00 from holding MEBUKI FINANCIAL GROUP or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. MEBUKI FINANCIAL GROUP
Performance |
| Timeline |
| Hanover Insurance |
| MEBUKI FINANCIAL |
Hanover Insurance and MEBUKI FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and MEBUKI FINANCIAL
The main advantage of trading using opposite Hanover Insurance and MEBUKI FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, MEBUKI FINANCIAL 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 MEBUKI FINANCIAL will offset losses from the drop in MEBUKI FINANCIAL's long position.| Hanover Insurance vs. Khiron Life Sciences | Hanover Insurance vs. Chunghwa Telecom Co | Hanover Insurance vs. Citic Telecom International | Hanover Insurance vs. RELIANCE STEEL AL |
| MEBUKI FINANCIAL vs. Lifeway Foods | MEBUKI FINANCIAL vs. Premier Foods PLC | MEBUKI FINANCIAL vs. PT Indofood Sukses | MEBUKI FINANCIAL 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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