Correlation Between Hanover Insurance and THORNEY TECHS
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and THORNEY TECHS 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 THORNEY TECHS 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 THORNEY TECHS LTD, you can compare the effects of market volatilities on Hanover Insurance and THORNEY TECHS 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 THORNEY TECHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and THORNEY TECHS.
Diversification Opportunities for Hanover Insurance and THORNEY TECHS
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanover and THORNEY is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and THORNEY TECHS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THORNEY TECHS LTD 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 THORNEY TECHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THORNEY TECHS LTD has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and THORNEY TECHS go up and down completely randomly.
Pair Corralation between Hanover Insurance and THORNEY TECHS
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.36 times more return on investment than THORNEY TECHS. However, The Hanover Insurance is 2.78 times less risky than THORNEY TECHS. It trades about -0.12 of its potential returns per unit of risk. THORNEY TECHS LTD is currently generating about -0.05 per unit of risk. If you would invest 15,100 in The Hanover Insurance on September 13, 2024 and sell it today you would lose (500.00) from holding The Hanover Insurance or give up 3.31% 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. THORNEY TECHS LTD
Performance |
| Timeline |
| Hanover Insurance |
| THORNEY TECHS LTD |
Hanover Insurance and THORNEY TECHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and THORNEY TECHS
The main advantage of trading using opposite Hanover Insurance and THORNEY TECHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, THORNEY TECHS 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 THORNEY TECHS will offset losses from the drop in THORNEY TECHS's long position.| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. ZhongAn Online P |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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