Correlation Between Hanover Insurance and CREDIT AGRICOLE
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and CREDIT AGRICOLE 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 CREDIT AGRICOLE 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 CREDIT AGRICOLE, you can compare the effects of market volatilities on Hanover Insurance and CREDIT AGRICOLE 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 CREDIT AGRICOLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and CREDIT AGRICOLE.
Diversification Opportunities for Hanover Insurance and CREDIT AGRICOLE
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanover and CREDIT is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and CREDIT AGRICOLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREDIT AGRICOLE 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 CREDIT AGRICOLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CREDIT AGRICOLE has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and CREDIT AGRICOLE go up and down completely randomly.
Pair Corralation between Hanover Insurance and CREDIT AGRICOLE
Assuming the 90 days horizon The Hanover Insurance is expected to generate 1.14 times more return on investment than CREDIT AGRICOLE. However, Hanover Insurance is 1.14 times more volatile than CREDIT AGRICOLE. It trades about 0.27 of its potential returns per unit of risk. CREDIT AGRICOLE is currently generating about -0.23 per unit of risk. If you would invest 13,800 in The Hanover Insurance on August 25, 2024 and sell it today you would earn a total of 1,400 from holding The Hanover Insurance or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. CREDIT AGRICOLE
Performance |
| Timeline |
| Hanover Insurance |
| CREDIT AGRICOLE |
Hanover Insurance and CREDIT AGRICOLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and CREDIT AGRICOLE
The main advantage of trading using opposite Hanover Insurance and CREDIT AGRICOLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, CREDIT AGRICOLE 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 CREDIT AGRICOLE will offset losses from the drop in CREDIT AGRICOLE's long position.| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. Loews Corp |
| CREDIT AGRICOLE vs. Perseus Mining Limited | CREDIT AGRICOLE vs. SERI INDUSTRIAL EO | CREDIT AGRICOLE vs. GREENX METALS LTD | CREDIT AGRICOLE vs. XLMedia PLC |
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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