Correlation Between CeoTronics and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both CeoTronics 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 CeoTronics and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and The Hanover Insurance, you can compare the effects of market volatilities on CeoTronics 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 CeoTronics with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and Hanover Insurance.
Diversification Opportunities for CeoTronics and Hanover Insurance
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CeoTronics and Hanover is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and CeoTronics 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 CeoTronics AG 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 CeoTronics i.e., CeoTronics and Hanover Insurance go up and down completely randomly.
Pair Corralation between CeoTronics and Hanover Insurance
Assuming the 90 days trading horizon CeoTronics AG is expected to generate 1.13 times more return on investment than Hanover Insurance. However, CeoTronics is 1.13 times more volatile than The Hanover Insurance. It trades about 0.04 of its potential returns per unit of risk. The Hanover Insurance is currently generating about -0.08 per unit of risk. If you would invest 620.00 in CeoTronics AG on October 16, 2024 and sell it today you would earn a total of 5.00 from holding CeoTronics AG or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CeoTronics AG vs. The Hanover Insurance
Performance |
| Timeline |
| CeoTronics AG |
| Hanover Insurance |
CeoTronics and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and Hanover Insurance
The main advantage of trading using opposite CeoTronics and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics 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.| CeoTronics vs. COMBA TELECOM SYST | CeoTronics vs. The Trade Desk | CeoTronics vs. Charter Communications | CeoTronics vs. Zoom Video Communications |
| Hanover Insurance vs. EPSILON HEALTHCARE LTD | Hanover Insurance vs. OPKO HEALTH | Hanover Insurance vs. Park Hotels Resorts | Hanover Insurance vs. Dalata Hotel Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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