Correlation Between Hanover Insurance and MIRAMAR HOTEL
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and MIRAMAR HOTEL 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 MIRAMAR HOTEL 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 MIRAMAR HOTEL INV, you can compare the effects of market volatilities on Hanover Insurance and MIRAMAR HOTEL 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 MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and MIRAMAR HOTEL.
Diversification Opportunities for Hanover Insurance and MIRAMAR HOTEL
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanover and MIRAMAR is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV 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 MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and MIRAMAR HOTEL go up and down completely randomly.
Pair Corralation between Hanover Insurance and MIRAMAR HOTEL
Assuming the 90 days horizon Hanover Insurance is expected to generate 3.34 times less return on investment than MIRAMAR HOTEL. But when comparing it to its historical volatility, The Hanover Insurance is 1.75 times less risky than MIRAMAR HOTEL. It trades about 0.03 of its potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 56.00 in MIRAMAR HOTEL INV on September 13, 2024 and sell it today you would earn a total of 56.00 from holding MIRAMAR HOTEL INV or generate 100.0% 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. MIRAMAR HOTEL INV
Performance |
| Timeline |
| Hanover Insurance |
| MIRAMAR HOTEL INV |
Hanover Insurance and MIRAMAR HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and MIRAMAR HOTEL
The main advantage of trading using opposite Hanover Insurance and MIRAMAR HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, MIRAMAR HOTEL 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 MIRAMAR HOTEL will offset losses from the drop in MIRAMAR HOTEL's long position.| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. ZhongAn Online P |
| MIRAMAR HOTEL vs. UNITED RENTALS | MIRAMAR HOTEL vs. Insurance Australia Group | MIRAMAR HOTEL vs. Air Lease | MIRAMAR HOTEL vs. The Hanover Insurance |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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