Correlation Between Evolution Gaming and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Evolution Gaming 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 Evolution Gaming and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Gaming Group and The Hanover Insurance, you can compare the effects of market volatilities on Evolution Gaming 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 Evolution Gaming with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Gaming and Hanover Insurance.
Diversification Opportunities for Evolution Gaming and Hanover Insurance
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evolution and Hanover is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Gaming Group and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Evolution Gaming 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 Evolution Gaming Group 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 Evolution Gaming i.e., Evolution Gaming and Hanover Insurance go up and down completely randomly.
Pair Corralation between Evolution Gaming and Hanover Insurance
Assuming the 90 days horizon Evolution Gaming Group is expected to under-perform the Hanover Insurance. In addition to that, Evolution Gaming is 1.59 times more volatile than The Hanover Insurance. It trades about -0.03 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 12,463 in The Hanover Insurance on September 4, 2024 and sell it today you would earn a total of 3,865 from holding The Hanover Insurance or generate 31.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Gaming Group vs. The Hanover Insurance
Performance |
| Timeline |
| Evolution Gaming |
| Hanover Insurance |
Evolution Gaming and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Gaming and Hanover Insurance
The main advantage of trading using opposite Evolution Gaming and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Gaming 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.| Evolution Gaming vs. Galaxy Gaming | Evolution Gaming vs. Everi Holdings | Evolution Gaming vs. Intema Solutions | Evolution Gaming vs. 888 Holdings |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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