Correlation Between Hanover Insurance and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Ramsay Health 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 Ramsay Health 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 Ramsay Health Care, you can compare the effects of market volatilities on Hanover Insurance and Ramsay Health 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 Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Ramsay Health.
Diversification Opportunities for Hanover Insurance and Ramsay Health
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanover and Ramsay is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Ramsay Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Health Care 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 Ramsay Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Health Care has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Ramsay Health go up and down completely randomly.
Pair Corralation between Hanover Insurance and Ramsay Health
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.94 times more return on investment than Ramsay Health. However, The Hanover Insurance is 1.06 times less risky than Ramsay Health. It trades about 0.03 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.07 per unit of risk. If you would invest 11,899 in The Hanover Insurance on September 23, 2024 and sell it today you would earn a total of 2,701 from holding The Hanover Insurance or generate 22.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Ramsay Health Care
Performance |
| Timeline |
| Hanover Insurance |
| Ramsay Health Care |
Hanover Insurance and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Ramsay Health
The main advantage of trading using opposite Hanover Insurance and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Ramsay Health 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 Ramsay Health will offset losses from the drop in Ramsay Health'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 |
| Ramsay Health vs. YOOMA WELLNESS INC | Ramsay Health vs. Bumrungrad Hospital Public | Ramsay Health vs. International Game Technology | Ramsay Health vs. Bausch Health Companies |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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