Correlation Between Hanover Insurance and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and MeVis Medical 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 MeVis Medical 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 MeVis Medical Solutions, you can compare the effects of market volatilities on Hanover Insurance and MeVis Medical 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 MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and MeVis Medical.
Diversification Opportunities for Hanover Insurance and MeVis Medical
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanover and MeVis is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions 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 MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and MeVis Medical go up and down completely randomly.
Pair Corralation between Hanover Insurance and MeVis Medical
Assuming the 90 days horizon The Hanover Insurance is expected to generate 1.44 times more return on investment than MeVis Medical. However, Hanover Insurance is 1.44 times more volatile than MeVis Medical Solutions. It trades about 0.16 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about -0.06 per unit of risk. If you would invest 11,832 in The Hanover Insurance on September 1, 2024 and sell it today you would earn a total of 3,968 from holding The Hanover Insurance or generate 33.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. MeVis Medical Solutions
Performance |
| Timeline |
| Hanover Insurance |
| MeVis Medical Solutions |
Hanover Insurance and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and MeVis Medical
The main advantage of trading using opposite Hanover Insurance and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, MeVis Medical 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.| Hanover Insurance vs. National Beverage Corp | Hanover Insurance vs. United Breweries Co | Hanover Insurance vs. Sabra Health Care | Hanover Insurance vs. Clearside Biomedical |
| MeVis Medical vs. G III Apparel Group | MeVis Medical vs. AM EAGLE OUTFITTERS | MeVis Medical vs. RYU Apparel | MeVis Medical vs. Fast Retailing Co |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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