Correlation Between Hanover Insurance and LEWAG HOLDING
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and LEWAG HOLDING 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 LEWAG HOLDING 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 LEWAG HOLDING AG, you can compare the effects of market volatilities on Hanover Insurance and LEWAG HOLDING 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 LEWAG HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and LEWAG HOLDING.
Diversification Opportunities for Hanover Insurance and LEWAG HOLDING
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanover and LEWAG is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and LEWAG HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEWAG HOLDING 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 LEWAG HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEWAG HOLDING AG has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and LEWAG HOLDING go up and down completely randomly.
Pair Corralation between Hanover Insurance and LEWAG HOLDING
Assuming the 90 days horizon The Hanover Insurance is expected to under-perform the LEWAG HOLDING. But the stock apears to be less risky and, when comparing its historical volatility, The Hanover Insurance is 2.1 times less risky than LEWAG HOLDING. The stock trades about -0.07 of its potential returns per unit of risk. The LEWAG HOLDING AG is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,180 in LEWAG HOLDING AG on September 13, 2024 and sell it today you would lose (30.00) from holding LEWAG HOLDING AG or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Hanover Insurance vs. LEWAG HOLDING AG
Performance |
| Timeline |
| Hanover Insurance |
| LEWAG HOLDING AG |
Hanover Insurance and LEWAG HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and LEWAG HOLDING
The main advantage of trading using opposite Hanover Insurance and LEWAG HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, LEWAG HOLDING 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 LEWAG HOLDING will offset losses from the drop in LEWAG HOLDING's long position.| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. ZhongAn Online P |
| LEWAG HOLDING vs. GungHo Online Entertainment | LEWAG HOLDING vs. New Residential Investment | LEWAG HOLDING vs. PennyMac Mortgage Investment | LEWAG HOLDING vs. DIVERSIFIED ROYALTY |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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