Correlation Between Hanover Insurance and PT Gudang
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and PT Gudang 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 PT Gudang 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 PT Gudang Garam, you can compare the effects of market volatilities on Hanover Insurance and PT Gudang 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 PT Gudang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and PT Gudang.
Diversification Opportunities for Hanover Insurance and PT Gudang
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanover and GGG is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and PT Gudang Garam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Gudang Garam 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 PT Gudang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Gudang Garam has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and PT Gudang go up and down completely randomly.
Pair Corralation between Hanover Insurance and PT Gudang
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.26 times more return on investment than PT Gudang. However, The Hanover Insurance is 3.82 times less risky than PT Gudang. It trades about 0.09 of its potential returns per unit of risk. PT Gudang Garam is currently generating about 0.0 per unit of risk. If you would invest 10,495 in The Hanover Insurance on September 14, 2024 and sell it today you would earn a total of 4,105 from holding The Hanover Insurance or generate 39.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. PT Gudang Garam
Performance |
| Timeline |
| Hanover Insurance |
| PT Gudang Garam |
Hanover Insurance and PT Gudang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and PT Gudang
The main advantage of trading using opposite Hanover Insurance and PT Gudang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, PT Gudang 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 PT Gudang will offset losses from the drop in PT Gudang's long position.| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. ZhongAn Online P |
| PT Gudang vs. SCANSOURCE | PT Gudang vs. INSURANCE AUST GRP | PT Gudang vs. ScanSource | PT Gudang vs. The Hanover Insurance |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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