Correlation Between Hanover Insurance and AUST AGRICULTURAL
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and AUST AGRICULTURAL 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 AUST AGRICULTURAL 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 AUST AGRICULTURAL, you can compare the effects of market volatilities on Hanover Insurance and AUST AGRICULTURAL 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 AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and AUST AGRICULTURAL.
Diversification Opportunities for Hanover Insurance and AUST AGRICULTURAL
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanover and AUST is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL 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 AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and AUST AGRICULTURAL go up and down completely randomly.
Pair Corralation between Hanover Insurance and AUST AGRICULTURAL
Assuming the 90 days horizon The Hanover Insurance is expected to under-perform the AUST AGRICULTURAL. In addition to that, Hanover Insurance is 1.26 times more volatile than AUST AGRICULTURAL. It trades about -0.07 of its total potential returns per unit of risk. AUST AGRICULTURAL is currently generating about -0.05 per unit of volatility. If you would invest 83.00 in AUST AGRICULTURAL on September 13, 2024 and sell it today you would lose (1.00) from holding AUST AGRICULTURAL or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. AUST AGRICULTURAL
Performance |
| Timeline |
| Hanover Insurance |
| AUST AGRICULTURAL |
Hanover Insurance and AUST AGRICULTURAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and AUST AGRICULTURAL
The main advantage of trading using opposite Hanover Insurance and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, AUST AGRICULTURAL 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 AUST AGRICULTURAL will offset losses from the drop in AUST AGRICULTURAL's long position.| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. ZhongAn Online P |
| AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |