Correlation Between Hanover Insurance and LendingTree
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and LendingTree 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 LendingTree 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 LendingTree, you can compare the effects of market volatilities on Hanover Insurance and LendingTree 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 LendingTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and LendingTree.
Diversification Opportunities for Hanover Insurance and LendingTree
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanover and LendingTree is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and LendingTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingTree 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 LendingTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LendingTree has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and LendingTree go up and down completely randomly.
Pair Corralation between Hanover Insurance and LendingTree
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.36 times more return on investment than LendingTree. However, The Hanover Insurance is 2.75 times less risky than LendingTree. It trades about 0.21 of its potential returns per unit of risk. LendingTree is currently generating about -0.07 per unit of risk. If you would invest 13,014 in The Hanover Insurance on September 2, 2024 and sell it today you would earn a total of 2,786 from holding The Hanover Insurance or generate 21.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. LendingTree
Performance |
| Timeline |
| Hanover Insurance |
| LendingTree |
Hanover Insurance and LendingTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and LendingTree
The main advantage of trading using opposite Hanover Insurance and LendingTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, LendingTree 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 LendingTree will offset losses from the drop in LendingTree's long position.| Hanover Insurance vs. Lion One Metals | Hanover Insurance vs. Jacquet Metal Service | Hanover Insurance vs. PARKEN Sport Entertainment | Hanover Insurance vs. Aluminum of |
| LendingTree vs. Insurance Australia Group | LendingTree vs. BRIT AMER TOBACCO | LendingTree vs. The Hanover Insurance | LendingTree vs. British American Tobacco |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |