Correlation Between Chuangs China and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both Chuangs China 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 Chuangs China and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and HANOVER INSURANCE, you can compare the effects of market volatilities on Chuangs China 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 Chuangs China with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and HANOVER INSURANCE.
Diversification Opportunities for Chuangs China and HANOVER INSURANCE
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and HANOVER is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and Chuangs China 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 Chuangs China Investments 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 Chuangs China i.e., Chuangs China and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between Chuangs China and HANOVER INSURANCE
Assuming the 90 days horizon Chuangs China is expected to generate 123.22 times less return on investment than HANOVER INSURANCE. But when comparing it to its historical volatility, Chuangs China Investments is 2.27 times less risky than HANOVER INSURANCE. It trades about 0.0 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 11,536 in HANOVER INSURANCE on September 2, 2024 and sell it today you would earn a total of 3,664 from holding HANOVER INSURANCE or generate 31.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. HANOVER INSURANCE
Performance |
| Timeline |
| Chuangs China Investments |
| HANOVER INSURANCE |
Chuangs China and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and HANOVER INSURANCE
The main advantage of trading using opposite Chuangs China and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China 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.| Chuangs China vs. Corporate Office Properties | Chuangs China vs. 24SEVENOFFICE GROUP AB | Chuangs China vs. MTI WIRELESS EDGE | Chuangs China vs. Tower One Wireless |
| HANOVER INSURANCE vs. SIVERS SEMICONDUCTORS AB | HANOVER INSURANCE vs. Darden Restaurants | HANOVER INSURANCE vs. Reliance Steel Aluminum | HANOVER INSURANCE vs. Q2M Managementberatung AG |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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