Correlation Between Hanover Insurance and NEXON
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and NEXON 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 NEXON 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 NEXON Co, you can compare the effects of market volatilities on Hanover Insurance and NEXON 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 NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and NEXON.
Diversification Opportunities for Hanover Insurance and NEXON
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanover and NEXON is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON 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 NEXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and NEXON go up and down completely randomly.
Pair Corralation between Hanover Insurance and NEXON
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.67 times more return on investment than NEXON. However, The Hanover Insurance is 1.49 times less risky than NEXON. It trades about -0.06 of its potential returns per unit of risk. NEXON Co is currently generating about -0.24 per unit of risk. If you would invest 14,600 in The Hanover Insurance on October 29, 2024 and sell it today you would lose (300.00) from holding The Hanover Insurance or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
The Hanover Insurance vs. NEXON Co
Performance |
| Timeline |
| Hanover Insurance |
| NEXON |
Hanover Insurance and NEXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and NEXON
The main advantage of trading using opposite Hanover Insurance and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, NEXON 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 NEXON will offset losses from the drop in NEXON's long position.| Hanover Insurance vs. EPSILON HEALTHCARE LTD | Hanover Insurance vs. NAGOYA RAILROAD | Hanover Insurance vs. SAFEROADS HLDGS | Hanover Insurance vs. PURETECH HEALTH PLC |
| NEXON vs. BURLINGTON STORES | NEXON vs. PATTIES FOODS | NEXON vs. GURU ORGANIC ENERGY | NEXON vs. GWILLI FOOD |
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.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |