Correlation Between Hanover Insurance and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and ASURE SOFTWARE 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 ASURE SOFTWARE 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 ASURE SOFTWARE, you can compare the effects of market volatilities on Hanover Insurance and ASURE SOFTWARE 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 ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and ASURE SOFTWARE.
Diversification Opportunities for Hanover Insurance and ASURE SOFTWARE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanover and ASURE is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE 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 ASURE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASURE SOFTWARE has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between Hanover Insurance and ASURE SOFTWARE
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.48 times more return on investment than ASURE SOFTWARE. However, The Hanover Insurance is 2.08 times less risky than ASURE SOFTWARE. It trades about 0.06 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about -0.01 per unit of risk. If you would invest 14,800 in The Hanover Insurance on September 12, 2024 and sell it today you would earn a total of 200.00 from holding The Hanover Insurance or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Hanover Insurance vs. ASURE SOFTWARE
Performance |
| Timeline |
| Hanover Insurance |
| ASURE SOFTWARE |
Hanover Insurance and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and ASURE SOFTWARE
The main advantage of trading using opposite Hanover Insurance and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, ASURE SOFTWARE 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 ASURE SOFTWARE will offset losses from the drop in ASURE SOFTWARE's long position.| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. ZhongAn Online P |
| ASURE SOFTWARE vs. Iridium Communications | ASURE SOFTWARE vs. AWILCO DRILLING PLC | ASURE SOFTWARE vs. Entravision Communications | ASURE SOFTWARE vs. PRECISION DRILLING P |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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