Correlation Between Capital Clean and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Capital Clean and Hanover Insurance 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 Capital Clean and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Clean Energy and The Hanover Insurance, you can compare the effects of market volatilities on Capital Clean and Hanover Insurance 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 Capital Clean with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Hanover Insurance.
Diversification Opportunities for Capital Clean and Hanover Insurance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capital and Hanover is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Capital Clean 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 Capital Clean Energy are associated (or correlated) with Hanover Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover Insurance has no effect on the direction of Capital Clean i.e., Capital Clean and Hanover Insurance go up and down completely randomly.
Pair Corralation between Capital Clean and Hanover Insurance
Given the investment horizon of 90 days Capital Clean is expected to generate 1.03 times less return on investment than Hanover Insurance. In addition to that, Capital Clean is 1.54 times more volatile than The Hanover Insurance. It trades about 0.06 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about 0.09 per unit of volatility. If you would invest 10,834 in The Hanover Insurance on August 27, 2024 and sell it today you would earn a total of 5,526 from holding The Hanover Insurance or generate 51.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Clean Energy vs. The Hanover Insurance
Performance |
| Timeline |
| Capital Clean Energy |
| Hanover Insurance |
Capital Clean and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Clean and Hanover Insurance
The main advantage of trading using opposite Capital Clean and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Clean position performs unexpectedly, Hanover Insurance 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 Hanover Insurance will offset losses from the drop in Hanover Insurance's long position.| Capital Clean vs. Star Bulk Carriers | Capital Clean vs. TOP Ships | Capital Clean vs. Seanergy Maritime Holdings | Capital Clean vs. Performance Shipping |
| Hanover Insurance vs. Horace Mann Educators | Hanover Insurance vs. Kemper | Hanover Insurance vs. RLI Corp | Hanover Insurance vs. Global Indemnity 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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