Correlation Between Hanover Insurance and Mizuho Financial
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Mizuho Financial 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 Mizuho Financial 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 Mizuho Financial Group, you can compare the effects of market volatilities on Hanover Insurance and Mizuho Financial 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 Mizuho Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Mizuho Financial.
Diversification Opportunities for Hanover Insurance and Mizuho Financial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hanover and Mizuho is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Mizuho Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizuho Financial 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 Mizuho Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mizuho Financial has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Mizuho Financial go up and down completely randomly.
Pair Corralation between Hanover Insurance and Mizuho Financial
Assuming the 90 days horizon Hanover Insurance is expected to generate 1.43 times less return on investment than Mizuho Financial. But when comparing it to its historical volatility, The Hanover Insurance is 1.19 times less risky than Mizuho Financial. It trades about 0.38 of its potential returns per unit of risk. Mizuho Financial Group is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 380.00 in Mizuho Financial Group on September 1, 2024 and sell it today you would earn a total of 86.00 from holding Mizuho Financial Group or generate 22.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Mizuho Financial Group
Performance |
| Timeline |
| Hanover Insurance |
| Mizuho Financial |
Hanover Insurance and Mizuho Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Mizuho Financial
The main advantage of trading using opposite Hanover Insurance and Mizuho Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Mizuho Financial 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 Mizuho Financial will offset losses from the drop in Mizuho Financial'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 |
| Mizuho Financial vs. FAST RETAIL ADR | Mizuho Financial vs. INTER CARS SA | Mizuho Financial vs. MARKET VECTR RETAIL | Mizuho Financial vs. CARSALESCOM |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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