Correlation Between Hanover Insurance and Suntory Beverage
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Suntory Beverage 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 Suntory Beverage 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 Suntory Beverage Food, you can compare the effects of market volatilities on Hanover Insurance and Suntory Beverage 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 Suntory Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Suntory Beverage.
Diversification Opportunities for Hanover Insurance and Suntory Beverage
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanover and Suntory is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food 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 Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Suntory Beverage go up and down completely randomly.
Pair Corralation between Hanover Insurance and Suntory Beverage
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.86 times more return on investment than Suntory Beverage. However, The Hanover Insurance is 1.16 times less risky than Suntory Beverage. It trades about 0.12 of its potential returns per unit of risk. Suntory Beverage Food is currently generating about -0.08 per unit of risk. If you would invest 13,019 in The Hanover Insurance on September 26, 2024 and sell it today you would earn a total of 1,581 from holding The Hanover Insurance or generate 12.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Suntory Beverage Food
Performance |
| Timeline |
| Hanover Insurance |
| Suntory Beverage Food |
Hanover Insurance and Suntory Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Suntory Beverage
The main advantage of trading using opposite Hanover Insurance and Suntory Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Suntory Beverage 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 Suntory Beverage will offset losses from the drop in Suntory Beverage's long position.| Hanover Insurance vs. Tokio Marine Holdings | Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. Loews Corp |
| Suntory Beverage vs. National Storage Affiliates | Suntory Beverage vs. The Hanover Insurance | Suntory Beverage vs. Fidelity National Information | Suntory Beverage vs. Science Applications International |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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