Correlation Between Hanover Insurance and Gruppo Mutuionline
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Gruppo Mutuionline 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 Gruppo Mutuionline 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 Gruppo Mutuionline SpA, you can compare the effects of market volatilities on Hanover Insurance and Gruppo Mutuionline 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 Gruppo Mutuionline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Gruppo Mutuionline.
Diversification Opportunities for Hanover Insurance and Gruppo Mutuionline
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanover and Gruppo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA 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 Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Gruppo Mutuionline go up and down completely randomly.
Pair Corralation between Hanover Insurance and Gruppo Mutuionline
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.83 times more return on investment than Gruppo Mutuionline. However, The Hanover Insurance is 1.2 times less risky than Gruppo Mutuionline. It trades about 0.22 of its potential returns per unit of risk. Gruppo Mutuionline SpA is currently generating about 0.17 per unit of risk. If you would invest 13,400 in The Hanover Insurance on August 29, 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 | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
The Hanover Insurance vs. Gruppo Mutuionline SpA
Performance |
| Timeline |
| Hanover Insurance |
| Gruppo Mutuionline SpA |
Hanover Insurance and Gruppo Mutuionline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Gruppo Mutuionline
The main advantage of trading using opposite Hanover Insurance and Gruppo Mutuionline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Gruppo Mutuionline 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 Gruppo Mutuionline will offset losses from the drop in Gruppo Mutuionline's long position.| Hanover Insurance vs. Tokio Marine Holdings | Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. Beazley PLC |
| Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc |
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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