Correlation Between Hanover Insurance and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Vastned Retail 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 Vastned Retail 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 Vastned Retail NV, you can compare the effects of market volatilities on Hanover Insurance and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Vastned Retail.
Diversification Opportunities for Hanover Insurance and Vastned Retail
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanover and Vastned is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Vastned Retail go up and down completely randomly.
Pair Corralation between Hanover Insurance and Vastned Retail
Assuming the 90 days horizon Hanover Insurance is expected to generate 1.41 times less return on investment than Vastned Retail. In addition to that, Hanover Insurance is 1.09 times more volatile than Vastned Retail NV. It trades about 0.03 of its total potential returns per unit of risk. Vastned Retail NV is currently generating about 0.05 per unit of volatility. If you would invest 1,796 in Vastned Retail NV on August 29, 2024 and sell it today you would earn a total of 604.00 from holding Vastned Retail NV or generate 33.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Vastned Retail NV
Performance |
| Timeline |
| Hanover Insurance |
| Vastned Retail NV |
Hanover Insurance and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Vastned Retail
The main advantage of trading using opposite Hanover Insurance and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.| Hanover Insurance vs. Tokio Marine Holdings | Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. Beazley PLC |
| Vastned Retail vs. Martin Marietta Materials | Vastned Retail vs. SCANSOURCE | Vastned Retail vs. NORTHEAST UTILITIES | Vastned Retail vs. Check Point Software |
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 CEOs Directory module to screen CEOs from public companies around the world.
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