Correlation Between Hanover Insurance and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and WIMFARM SA 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 WIMFARM SA 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 WIMFARM SA EO, you can compare the effects of market volatilities on Hanover Insurance and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and WIMFARM SA.
Diversification Opportunities for Hanover Insurance and WIMFARM SA
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanover and WIMFARM is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and WIMFARM SA go up and down completely randomly.
Pair Corralation between Hanover Insurance and WIMFARM SA
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.36 times more return on investment than WIMFARM SA. However, The Hanover Insurance is 2.78 times less risky than WIMFARM SA. It trades about 0.07 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.03 per unit of risk. If you would invest 11,674 in The Hanover Insurance on November 3, 2024 and sell it today you would earn a total of 3,126 from holding The Hanover Insurance or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. WIMFARM SA EO
Performance |
| Timeline |
| Hanover Insurance |
| WIMFARM SA EO |
Hanover Insurance and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and WIMFARM SA
The main advantage of trading using opposite Hanover Insurance and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| Hanover Insurance vs. Computershare Limited | Hanover Insurance vs. Tokyu Construction Co | Hanover Insurance vs. North American Construction | Hanover Insurance vs. ALEFARM BREWING DK 05 |
| WIMFARM SA vs. CDL INVESTMENT | WIMFARM SA vs. Commercial Vehicle Group | WIMFARM SA vs. SEI INVESTMENTS | WIMFARM SA vs. CarsalesCom |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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