Correlation Between Hanover Insurance and SERI INDUSTRIAL
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and SERI INDUSTRIAL 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 SERI INDUSTRIAL 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 SERI INDUSTRIAL EO, you can compare the effects of market volatilities on Hanover Insurance and SERI INDUSTRIAL 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 SERI INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and SERI INDUSTRIAL.
Diversification Opportunities for Hanover Insurance and SERI INDUSTRIAL
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanover and SERI is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO 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 SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and SERI INDUSTRIAL go up and down completely randomly.
Pair Corralation between Hanover Insurance and SERI INDUSTRIAL
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.42 times more return on investment than SERI INDUSTRIAL. However, The Hanover Insurance is 2.41 times less risky than SERI INDUSTRIAL. It trades about 0.04 of its potential returns per unit of risk. SERI INDUSTRIAL EO is currently generating about -0.04 per unit of risk. If you would invest 11,049 in The Hanover Insurance on October 11, 2024 and sell it today you would earn a total of 3,251 from holding The Hanover Insurance or generate 29.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. SERI INDUSTRIAL EO
Performance |
| Timeline |
| Hanover Insurance |
| SERI INDUSTRIAL EO |
Hanover Insurance and SERI INDUSTRIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and SERI INDUSTRIAL
The main advantage of trading using opposite Hanover Insurance and SERI INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, SERI INDUSTRIAL 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 SERI INDUSTRIAL will offset losses from the drop in SERI INDUSTRIAL's long position.| Hanover Insurance vs. ZhongAn Online P | Hanover Insurance vs. BOS BETTER ONLINE | Hanover Insurance vs. G III Apparel Group | Hanover Insurance vs. Transport International Holdings |
| SERI INDUSTRIAL vs. TOREX SEMICONDUCTOR LTD | SERI INDUSTRIAL vs. Fast Retailing Co | SERI INDUSTRIAL vs. Tradeweb Markets | SERI INDUSTRIAL vs. FAST RETAIL ADR |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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