Correlation Between Hanover Insurance and Grand Canyon
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Grand Canyon 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 Grand Canyon 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 Grand Canyon Education, you can compare the effects of market volatilities on Hanover Insurance and Grand Canyon 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 Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Grand Canyon.
Diversification Opportunities for Hanover Insurance and Grand Canyon
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanover and Grand is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education 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 Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Grand Canyon go up and down completely randomly.
Pair Corralation between Hanover Insurance and Grand Canyon
Assuming the 90 days horizon The Hanover Insurance is expected to under-perform the Grand Canyon. But the stock apears to be less risky and, when comparing its historical volatility, The Hanover Insurance is 1.26 times less risky than Grand Canyon. The stock trades about -0.21 of its potential returns per unit of risk. The Grand Canyon Education is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 15,400 in Grand Canyon Education on September 22, 2024 and sell it today you would earn a total of 100.00 from holding Grand Canyon Education or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Grand Canyon Education
Performance |
| Timeline |
| Hanover Insurance |
| Grand Canyon Education |
Hanover Insurance and Grand Canyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Grand Canyon
The main advantage of trading using opposite Hanover Insurance and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Grand Canyon 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 Grand Canyon will offset losses from the drop in Grand Canyon's long position.| Hanover Insurance vs. Air Lease | Hanover Insurance vs. SLR Investment Corp | Hanover Insurance vs. Virtus Investment Partners | Hanover Insurance vs. Jacquet Metal Service |
| Grand Canyon vs. STMicroelectronics NV | Grand Canyon vs. CompuGroup Medical SE | Grand Canyon vs. AOI Electronics Co | Grand Canyon vs. Merit Medical Systems |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |