Correlation Between Ep Emerging and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Ep Emerging 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 Ep Emerging and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ep Emerging Markets and The Hanover Insurance, you can compare the effects of market volatilities on Ep Emerging 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 Ep Emerging with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and Hanover Insurance.
Diversification Opportunities for Ep Emerging and Hanover Insurance
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EPASX and Hanover is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Ep Emerging 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 Ep Emerging Markets 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 Ep Emerging i.e., Ep Emerging and Hanover Insurance go up and down completely randomly.
Pair Corralation between Ep Emerging and Hanover Insurance
Assuming the 90 days horizon Ep Emerging Markets is expected to generate 0.56 times more return on investment than Hanover Insurance. However, Ep Emerging Markets is 1.78 times less risky than Hanover Insurance. It trades about 0.01 of its potential returns per unit of risk. The Hanover Insurance is currently generating about -0.22 per unit of risk. If you would invest 1,017 in Ep Emerging Markets on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Ep Emerging Markets or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ep Emerging Markets vs. The Hanover Insurance
Performance |
| Timeline |
| Ep Emerging Markets |
| Hanover Insurance |
Ep Emerging and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and Hanover Insurance
The main advantage of trading using opposite Ep Emerging and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging 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.| Ep Emerging vs. American Funds New | Ep Emerging vs. SCOR PK | Ep Emerging vs. Morningstar Unconstrained Allocation | Ep Emerging vs. Via Renewables |
| Hanover Insurance vs. Aeye Inc | Hanover Insurance vs. Ep Emerging Markets | Hanover Insurance vs. LiCycle Holdings Corp | Hanover Insurance vs. SEI Investments |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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