Correlation Between First Acceptance and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both First Acceptance 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 First Acceptance and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Acceptance Corp and The Hanover Insurance, you can compare the effects of market volatilities on First Acceptance 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 First Acceptance with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Acceptance and Hanover Insurance.
Diversification Opportunities for First Acceptance and Hanover Insurance
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Hanover is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding First Acceptance Corp and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and First Acceptance 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 First Acceptance Corp 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 First Acceptance i.e., First Acceptance and Hanover Insurance go up and down completely randomly.
Pair Corralation between First Acceptance and Hanover Insurance
If you would invest 14,915 in The Hanover Insurance on August 27, 2024 and sell it today you would earn a total of 1,445 from holding The Hanover Insurance or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
First Acceptance Corp vs. The Hanover Insurance
Performance |
| Timeline |
| First Acceptance Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hanover Insurance |
First Acceptance and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Acceptance and Hanover Insurance
The main advantage of trading using opposite First Acceptance and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Acceptance 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.| First Acceptance vs. Essent Group | First Acceptance vs. James River Group | First Acceptance vs. MGIC Investment Corp | First Acceptance vs. Employers 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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