Correlation Between Hanover Insurance and UMC Electronics
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and UMC Electronics 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 UMC Electronics 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 UMC Electronics Co, you can compare the effects of market volatilities on Hanover Insurance and UMC Electronics 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 UMC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and UMC Electronics.
Diversification Opportunities for Hanover Insurance and UMC Electronics
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanover and UMC is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and UMC Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMC Electronics 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 UMC Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMC Electronics has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and UMC Electronics go up and down completely randomly.
Pair Corralation between Hanover Insurance and UMC Electronics
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.79 times more return on investment than UMC Electronics. However, The Hanover Insurance is 1.26 times less risky than UMC Electronics. It trades about 0.43 of its potential returns per unit of risk. UMC Electronics Co is currently generating about -0.15 per unit of risk. If you would invest 13,500 in The Hanover Insurance on September 2, 2024 and sell it today you would earn a total of 2,300 from holding The Hanover Insurance or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. UMC Electronics Co
Performance |
| Timeline |
| Hanover Insurance |
| UMC Electronics |
Hanover Insurance and UMC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and UMC Electronics
The main advantage of trading using opposite Hanover Insurance and UMC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, UMC Electronics 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 UMC Electronics will offset losses from the drop in UMC Electronics' 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 |
| UMC Electronics vs. CHINA TONTINE WINES | UMC Electronics vs. Silicon Motion Technology | UMC Electronics vs. China BlueChemical | UMC Electronics vs. Sanyo Chemical Industries |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |