Correlation Between Geely Automobile and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Geely Automobile 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 Geely Automobile and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and The Hanover Insurance, you can compare the effects of market volatilities on Geely Automobile 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 Geely Automobile with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Hanover Insurance.
Diversification Opportunities for Geely Automobile and Hanover Insurance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Geely and Hanover is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Geely Automobile 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 Geely Automobile Holdings 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 Geely Automobile i.e., Geely Automobile and Hanover Insurance go up and down completely randomly.
Pair Corralation between Geely Automobile and Hanover Insurance
Assuming the 90 days horizon Geely Automobile Holdings is expected to under-perform the Hanover Insurance. In addition to that, Geely Automobile is 1.03 times more volatile than The Hanover Insurance. It trades about -0.27 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about 0.2 per unit of volatility. If you would invest 14,300 in The Hanover Insurance on October 20, 2024 and sell it today you would earn a total of 800.00 from holding The Hanover Insurance or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. The Hanover Insurance
Performance |
| Timeline |
| Geely Automobile Holdings |
| Hanover Insurance |
Geely Automobile and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Hanover Insurance
The main advantage of trading using opposite Geely Automobile and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile 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.| Geely Automobile vs. ALERION CLEANPOWER | Geely Automobile vs. ANTA SPORTS PRODUCT | Geely Automobile vs. Fortescue Metals Group | Geely Automobile vs. ADRIATIC METALS LS 013355 |
| Hanover Insurance vs. Bio Techne Corp | Hanover Insurance vs. Geely Automobile Holdings | Hanover Insurance vs. T MOBILE INCDL 00001 | Hanover Insurance vs. Chengdu PUTIAN Telecommunications |
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.
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