Correlation Between FORMPIPE SOFTWARE and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FORMPIPE SOFTWARE AB and The Hanover Insurance, you can compare the effects of market volatilities on FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORMPIPE SOFTWARE and Hanover Insurance.
Diversification Opportunities for FORMPIPE SOFTWARE and Hanover Insurance
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FORMPIPE and Hanover is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB 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 FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and Hanover Insurance go up and down completely randomly.
Pair Corralation between FORMPIPE SOFTWARE and Hanover Insurance
Assuming the 90 days horizon FORMPIPE SOFTWARE AB is expected to under-perform the Hanover Insurance. In addition to that, FORMPIPE SOFTWARE is 1.35 times more volatile than The Hanover Insurance. It trades about -0.04 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about 0.06 per unit of volatility. If you would invest 14,800 in The Hanover Insurance on September 12, 2024 and sell it today you would earn a total of 200.00 from holding The Hanover Insurance or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORMPIPE SOFTWARE AB vs. The Hanover Insurance
Performance |
| Timeline |
| FORMPIPE SOFTWARE |
| Hanover Insurance |
FORMPIPE SOFTWARE and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORMPIPE SOFTWARE and Hanover Insurance
The main advantage of trading using opposite FORMPIPE SOFTWARE and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORMPIPE SOFTWARE 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.| FORMPIPE SOFTWARE vs. Salesforce | FORMPIPE SOFTWARE vs. Superior Plus Corp | FORMPIPE SOFTWARE vs. SIVERS SEMICONDUCTORS AB | FORMPIPE SOFTWARE vs. Norsk Hydro ASA |
| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. ZhongAn Online P |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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