Correlation Between Hanover Insurance and Walgreens Boots
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Walgreens Boots 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 Walgreens Boots 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 Walgreens Boots Alliance, you can compare the effects of market volatilities on Hanover Insurance and Walgreens Boots 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 Walgreens Boots. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Walgreens Boots.
Diversification Opportunities for Hanover Insurance and Walgreens Boots
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hanover and Walgreens is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Walgreens Boots Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walgreens Boots Alliance 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 Walgreens Boots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walgreens Boots Alliance has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Walgreens Boots go up and down completely randomly.
Pair Corralation between Hanover Insurance and Walgreens Boots
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.55 times more return on investment than Walgreens Boots. However, The Hanover Insurance is 1.83 times less risky than Walgreens Boots. It trades about 0.04 of its potential returns per unit of risk. Walgreens Boots Alliance is currently generating about -0.07 per unit of risk. If you would invest 11,521 in The Hanover Insurance on October 9, 2024 and sell it today you would earn a total of 3,179 from holding The Hanover Insurance or generate 27.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
The Hanover Insurance vs. Walgreens Boots Alliance
Performance |
| Timeline |
| Hanover Insurance |
| Walgreens Boots Alliance |
Hanover Insurance and Walgreens Boots Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Walgreens Boots
The main advantage of trading using opposite Hanover Insurance and Walgreens Boots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Walgreens Boots 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 Walgreens Boots will offset losses from the drop in Walgreens Boots' long position.| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. Loews Corp | Hanover Insurance vs. Superior Plus Corp | Hanover Insurance vs. NMI Holdings |
| Walgreens Boots vs. KINGBOARD CHEMICAL | Walgreens Boots vs. Mitsui Chemicals | Walgreens Boots vs. BJs Restaurants | Walgreens Boots vs. VARIOUS EATERIES LS |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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