Correlation Between Hanover Insurance and Gestamp Automoción
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Gestamp Automoción 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 Gestamp Automoción 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 Gestamp Automocin SA, you can compare the effects of market volatilities on Hanover Insurance and Gestamp Automoción 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 Gestamp Automoción. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Gestamp Automoción.
Diversification Opportunities for Hanover Insurance and Gestamp Automoción
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanover and Gestamp is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Gestamp Automocin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gestamp Automoción 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 Gestamp Automoción. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gestamp Automoción has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Gestamp Automoción go up and down completely randomly.
Pair Corralation between Hanover Insurance and Gestamp Automoción
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.67 times more return on investment than Gestamp Automoción. However, The Hanover Insurance is 1.5 times less risky than Gestamp Automoción. It trades about 0.09 of its potential returns per unit of risk. Gestamp Automocin SA is currently generating about 0.01 per unit of risk. If you would invest 11,577 in The Hanover Insurance on December 2, 2024 and sell it today you would earn a total of 4,223 from holding The Hanover Insurance or generate 36.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Gestamp Automocin SA
Performance |
| Timeline |
| Hanover Insurance |
| Gestamp Automoción |
Hanover Insurance and Gestamp Automoción Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Gestamp Automoción
The main advantage of trading using opposite Hanover Insurance and Gestamp Automoción positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Gestamp Automoción 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 Gestamp Automoción will offset losses from the drop in Gestamp Automoción's long position.| Hanover Insurance vs. FORTRESS BIOTECHPRFA 25 | Hanover Insurance vs. Spirent Communications plc | Hanover Insurance vs. GLG LIFE TECH | Hanover Insurance vs. Sunny Optical Technology |
| Gestamp Automoción vs. Bumrungrad Hospital PCL | Gestamp Automoción vs. National Health Investors | Gestamp Automoción vs. WESANA HEALTH HOLD | Gestamp Automoción vs. YATRA ONLINE DL 0001 |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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