Correlation Between Hanover Insurance and Stewart Information
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Stewart Information 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 Stewart Information 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 Stewart Information Services, you can compare the effects of market volatilities on Hanover Insurance and Stewart Information 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 Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Stewart Information.
Diversification Opportunities for Hanover Insurance and Stewart Information
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanover and Stewart is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information 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 Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Stewart Information go up and down completely randomly.
Pair Corralation between Hanover Insurance and Stewart Information
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.84 times more return on investment than Stewart Information. However, The Hanover Insurance is 1.19 times less risky than Stewart Information. It trades about 0.36 of its potential returns per unit of risk. Stewart Information Services is currently generating about 0.19 per unit of risk. If you would invest 13,500 in The Hanover Insurance on August 31, 2024 and sell it today you would earn a total of 1,900 from holding The Hanover Insurance or generate 14.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Hanover Insurance vs. Stewart Information Services
Performance |
| Timeline |
| Hanover Insurance |
| Stewart Information |
Hanover Insurance and Stewart Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Stewart Information
The main advantage of trading using opposite Hanover Insurance and Stewart Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Stewart Information 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 Stewart Information will offset losses from the drop in Stewart Information's long position.| Hanover Insurance vs. Pentair plc | Hanover Insurance vs. AIR LIQUIDE ADR | Hanover Insurance vs. Norwegian Air Shuttle | Hanover Insurance vs. Computer And Technologies |
| Stewart Information vs. Chiba Bank | Stewart Information vs. National Bank Holdings | Stewart Information vs. The Hanover Insurance | Stewart Information vs. EAGLE MATERIALS |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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