Correlation Between Hanover Insurance and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Quaker Chemical 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 Quaker Chemical 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 Quaker Chemical, you can compare the effects of market volatilities on Hanover Insurance and Quaker Chemical 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 Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Quaker Chemical.
Diversification Opportunities for Hanover Insurance and Quaker Chemical
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanover and Quaker is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical 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 Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Quaker Chemical go up and down completely randomly.
Pair Corralation between Hanover Insurance and Quaker Chemical
Assuming the 90 days horizon The Hanover Insurance is expected to under-perform the Quaker Chemical. But the stock apears to be less risky and, when comparing its historical volatility, The Hanover Insurance is 1.14 times less risky than Quaker Chemical. The stock trades about -0.06 of its potential returns per unit of risk. The Quaker Chemical is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 13,350 in Quaker Chemical on October 28, 2024 and sell it today you would lose (50.00) from holding Quaker Chemical or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Quaker Chemical
Performance |
| Timeline |
| Hanover Insurance |
| Quaker Chemical |
Hanover Insurance and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Quaker Chemical
The main advantage of trading using opposite Hanover Insurance and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Quaker Chemical 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 Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.| Hanover Insurance vs. Tokio Marine Holdings | Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. Loews Corp | Hanover Insurance vs. American Financial Group |
| Quaker Chemical vs. ANTA SPORTS PRODUCT | Quaker Chemical vs. MeVis Medical Solutions | Quaker Chemical vs. Genertec Universal Medical | Quaker Chemical vs. Air Transport Services |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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