Correlation Between KVH Industries and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both KVH Industries 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 KVH Industries and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and The Hanover Insurance, you can compare the effects of market volatilities on KVH Industries 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 KVH Industries with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Hanover Insurance.
Diversification Opportunities for KVH Industries and Hanover Insurance
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KVH and Hanover is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and KVH Industries 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 KVH Industries 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 KVH Industries i.e., KVH Industries and Hanover Insurance go up and down completely randomly.
Pair Corralation between KVH Industries and Hanover Insurance
Given the investment horizon of 90 days KVH Industries is expected to generate 1.28 times less return on investment than Hanover Insurance. In addition to that, KVH Industries is 1.94 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 0.09 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. The Hanover Insurance
Performance |
| Timeline |
| KVH Industries |
| Hanover Insurance |
KVH Industries and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Hanover Insurance
The main advantage of trading using opposite KVH Industries and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries 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.| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |