Correlation Between Hanover Insurance and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and OPKO HEALTH 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 OPKO HEALTH 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 OPKO HEALTH, you can compare the effects of market volatilities on Hanover Insurance and OPKO HEALTH 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 OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and OPKO HEALTH.
Diversification Opportunities for Hanover Insurance and OPKO HEALTH
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanover and OPKO is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH 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 OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and OPKO HEALTH go up and down completely randomly.
Pair Corralation between Hanover Insurance and OPKO HEALTH
Assuming the 90 days horizon The Hanover Insurance is expected to generate 1.39 times more return on investment than OPKO HEALTH. However, Hanover Insurance is 1.39 times more volatile than OPKO HEALTH. It trades about 0.11 of its potential returns per unit of risk. OPKO HEALTH is currently generating about -0.24 per unit of risk. If you would invest 14,600 in The Hanover Insurance on October 22, 2024 and sell it today you would earn a total of 400.00 from holding The Hanover Insurance or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. OPKO HEALTH
Performance |
| Timeline |
| Hanover Insurance |
| OPKO HEALTH |
Hanover Insurance and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and OPKO HEALTH
The main advantage of trading using opposite Hanover Insurance and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, OPKO HEALTH 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 OPKO HEALTH will offset losses from the drop in OPKO HEALTH's long position.| Hanover Insurance vs. Commercial Vehicle Group | Hanover Insurance vs. Goodyear Tire Rubber | Hanover Insurance vs. GEELY AUTOMOBILE | Hanover Insurance vs. CarsalesCom |
| OPKO HEALTH vs. Citic Telecom International | OPKO HEALTH vs. BORR DRILLING NEW | OPKO HEALTH vs. Singapore Telecommunications Limited | OPKO HEALTH vs. Chengdu PUTIAN Telecommunications |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |