Correlation Between Hanover Insurance and Socit Gnrale
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Socit Gnrale 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 Socit Gnrale 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 Socit Gnrale Socit, you can compare the effects of market volatilities on Hanover Insurance and Socit Gnrale 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 Socit Gnrale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Socit Gnrale.
Diversification Opportunities for Hanover Insurance and Socit Gnrale
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanover and Socit is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Socit Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Socit Gnrale go up and down completely randomly.
Pair Corralation between Hanover Insurance and Socit Gnrale
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.71 times more return on investment than Socit Gnrale. However, The Hanover Insurance is 1.41 times less risky than Socit Gnrale. It trades about 0.15 of its potential returns per unit of risk. Socit Gnrale Socit is currently generating about -0.02 per unit of risk. If you would invest 11,635 in The Hanover Insurance on August 29, 2024 and sell it today you would earn a total of 3,665 from holding The Hanover Insurance or generate 31.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Socit Gnrale Socit
Performance |
| Timeline |
| Hanover Insurance |
| Socit Gnrale Socit |
Hanover Insurance and Socit Gnrale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Socit Gnrale
The main advantage of trading using opposite Hanover Insurance and Socit Gnrale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Socit Gnrale 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 Socit Gnrale will offset losses from the drop in Socit Gnrale's long position.| Hanover Insurance vs. Tokio Marine Holdings | Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. Beazley PLC |
| Socit Gnrale vs. BNP Paribas SA | Socit Gnrale vs. Deutsche Bank Aktiengesellschaft | Socit Gnrale vs. Santander Bank Polska |
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 Stocks Directory module to find actively traded stocks across global markets.
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