Correlation Between Hanover Insurance and ALBIS LEASING
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and ALBIS LEASING 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 ALBIS LEASING 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 ALBIS LEASING AG, you can compare the effects of market volatilities on Hanover Insurance and ALBIS LEASING 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 ALBIS LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and ALBIS LEASING.
Diversification Opportunities for Hanover Insurance and ALBIS LEASING
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanover and ALBIS is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and ALBIS LEASING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBIS LEASING AG 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 ALBIS LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBIS LEASING AG has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and ALBIS LEASING go up and down completely randomly.
Pair Corralation between Hanover Insurance and ALBIS LEASING
Assuming the 90 days horizon The Hanover Insurance is expected to generate 1.39 times more return on investment than ALBIS LEASING. However, Hanover Insurance is 1.39 times more volatile than ALBIS LEASING AG. It trades about 0.16 of its potential returns per unit of risk. ALBIS LEASING AG is currently generating about 0.19 per unit of risk. If you would invest 11,832 in The Hanover Insurance on September 1, 2024 and sell it today you would earn a total of 3,968 from holding The Hanover Insurance or generate 33.54% 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. ALBIS LEASING AG
Performance |
| Timeline |
| Hanover Insurance |
| ALBIS LEASING AG |
Hanover Insurance and ALBIS LEASING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and ALBIS LEASING
The main advantage of trading using opposite Hanover Insurance and ALBIS LEASING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, ALBIS LEASING 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 ALBIS LEASING will offset losses from the drop in ALBIS LEASING's long position.| Hanover Insurance vs. National Beverage Corp | Hanover Insurance vs. United Breweries Co | Hanover Insurance vs. Sabra Health Care | Hanover Insurance vs. Clearside Biomedical |
| ALBIS LEASING vs. BJs Restaurants | ALBIS LEASING vs. THAI BEVERAGE | ALBIS LEASING vs. BOSTON BEER A | ALBIS LEASING vs. Khiron Life Sciences |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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