Correlation Between Japan Medical and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both Japan Medical 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 Japan Medical and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Medical Dynamic and HANOVER INSURANCE, you can compare the effects of market volatilities on Japan Medical 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 Japan Medical with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Medical and HANOVER INSURANCE.
Diversification Opportunities for Japan Medical and HANOVER INSURANCE
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japan and HANOVER is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Japan Medical Dynamic and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and Japan Medical 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 Japan Medical Dynamic 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 Japan Medical i.e., Japan Medical and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between Japan Medical and HANOVER INSURANCE
Assuming the 90 days horizon Japan Medical Dynamic is expected to generate 0.99 times more return on investment than HANOVER INSURANCE. However, Japan Medical Dynamic is 1.01 times less risky than HANOVER INSURANCE. It trades about 0.06 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.05 per unit of risk. If you would invest 370.00 in Japan Medical Dynamic on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Japan Medical Dynamic or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Medical Dynamic vs. HANOVER INSURANCE
Performance |
| Timeline |
| Japan Medical Dynamic |
| HANOVER INSURANCE |
Japan Medical and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Medical and HANOVER INSURANCE
The main advantage of trading using opposite Japan Medical and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Medical 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.| Japan Medical vs. Align Technology | Japan Medical vs. Superior Plus Corp | Japan Medical vs. SIVERS SEMICONDUCTORS AB | Japan Medical vs. Norsk Hydro ASA |
| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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