Correlation Between Hanover Insurance and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and LOANDEPOT INC 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 LOANDEPOT INC 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 LOANDEPOT INC A, you can compare the effects of market volatilities on Hanover Insurance and LOANDEPOT INC 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 LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and LOANDEPOT INC.
Diversification Opportunities for Hanover Insurance and LOANDEPOT INC
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanover and LOANDEPOT is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between Hanover Insurance and LOANDEPOT INC
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.43 times more return on investment than LOANDEPOT INC. However, The Hanover Insurance is 2.32 times less risky than LOANDEPOT INC. It trades about 0.01 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about -0.12 per unit of risk. If you would invest 14,800 in The Hanover Insurance on November 3, 2024 and sell it today you would earn a total of 0.00 from holding The Hanover Insurance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. LOANDEPOT INC A
Performance |
| Timeline |
| Hanover Insurance |
| LOANDEPOT INC A |
Hanover Insurance and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and LOANDEPOT INC
The main advantage of trading using opposite Hanover Insurance and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| Hanover Insurance vs. NURAN WIRELESS INC | Hanover Insurance vs. SALESFORCE INC CDR | Hanover Insurance vs. Lamar Advertising | Hanover Insurance vs. PACIFIC ONLINE |
| LOANDEPOT INC vs. ecotel communication ag | LOANDEPOT INC vs. Verizon Communications | LOANDEPOT INC vs. Zoom Video Communications | LOANDEPOT INC vs. Entravision Communications |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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