Correlation Between Hanover Insurance and TELE2 B
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and TELE2 B 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 TELE2 B 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 TELE2 B , you can compare the effects of market volatilities on Hanover Insurance and TELE2 B 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 TELE2 B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and TELE2 B.
Diversification Opportunities for Hanover Insurance and TELE2 B
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanover and TELE2 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and TELE2 B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELE2 B 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 TELE2 B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELE2 B has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and TELE2 B go up and down completely randomly.
Pair Corralation between Hanover Insurance and TELE2 B
Assuming the 90 days horizon The Hanover Insurance is expected to under-perform the TELE2 B. In addition to that, Hanover Insurance is 1.3 times more volatile than TELE2 B . It trades about -0.19 of its total potential returns per unit of risk. TELE2 B is currently generating about -0.17 per unit of volatility. If you would invest 984.00 in TELE2 B on September 26, 2024 and sell it today you would lose (35.00) from holding TELE2 B or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. TELE2 B
Performance |
| Timeline |
| Hanover Insurance |
| TELE2 B |
Hanover Insurance and TELE2 B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and TELE2 B
The main advantage of trading using opposite Hanover Insurance and TELE2 B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, TELE2 B 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 TELE2 B will offset losses from the drop in TELE2 B's long position.| Hanover Insurance vs. Tokio Marine Holdings | Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. Loews Corp |
| TELE2 B vs. PennyMac Mortgage Investment | TELE2 B vs. TERADATA | TELE2 B vs. Gladstone Investment | TELE2 B vs. Datadog |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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