Correlation Between Hanover Insurance and Lexington Realty
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Lexington Realty 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 Lexington Realty 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 Lexington Realty Trust, you can compare the effects of market volatilities on Hanover Insurance and Lexington Realty 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 Lexington Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Lexington Realty.
Diversification Opportunities for Hanover Insurance and Lexington Realty
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanover and Lexington is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Lexington Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexington Realty Trust 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 Lexington Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexington Realty Trust has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Lexington Realty go up and down completely randomly.
Pair Corralation between Hanover Insurance and Lexington Realty
If you would invest 13,400 in The Hanover Insurance on September 4, 2024 and sell it today you would earn a total of 2,100 from holding The Hanover Insurance or generate 15.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
The Hanover Insurance vs. Lexington Realty Trust
Performance |
| Timeline |
| Hanover Insurance |
| Lexington Realty Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hanover Insurance and Lexington Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Lexington Realty
The main advantage of trading using opposite Hanover Insurance and Lexington Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Lexington Realty 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 Lexington Realty will offset losses from the drop in Lexington Realty's long position.| Hanover Insurance vs. Khiron Life Sciences | Hanover Insurance vs. Chunghwa Telecom Co | Hanover Insurance vs. Citic Telecom International | Hanover Insurance vs. RELIANCE STEEL AL |
| Lexington Realty vs. SLR Investment Corp | Lexington Realty vs. Virtus Investment Partners | Lexington Realty vs. Gladstone Investment | Lexington Realty vs. PennantPark Investment |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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