Correlation Between De Grey and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both De Grey 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 De Grey and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and HANOVER INSURANCE, you can compare the effects of market volatilities on De Grey 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 De Grey with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and HANOVER INSURANCE.
Diversification Opportunities for De Grey and HANOVER INSURANCE
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DGD and HANOVER is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and De Grey 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 De Grey Mining 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 De Grey i.e., De Grey and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between De Grey and HANOVER INSURANCE
Assuming the 90 days trading horizon De Grey Mining is expected to generate 2.26 times more return on investment than HANOVER INSURANCE. However, De Grey is 2.26 times more volatile than HANOVER INSURANCE. It trades about 0.03 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.03 per unit of risk. If you would invest 88.00 in De Grey Mining on October 26, 2024 and sell it today you would earn a total of 31.00 from holding De Grey Mining or generate 35.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. HANOVER INSURANCE
Performance |
| Timeline |
| De Grey Mining |
| HANOVER INSURANCE |
De Grey and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and HANOVER INSURANCE
The main advantage of trading using opposite De Grey and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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.The idea behind De Grey Mining and HANOVER INSURANCE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| HANOVER INSURANCE vs. AUST AGRICULTURAL | HANOVER INSURANCE vs. CITIC Telecom International | HANOVER INSURANCE vs. SK TELECOM TDADR | HANOVER INSURANCE vs. COMBA TELECOM SYST |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |