Correlation Between Linedata Services and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Linedata Services 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 Linedata Services and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Linedata Services SA and The Hanover Insurance, you can compare the effects of market volatilities on Linedata Services 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 Linedata Services with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and Hanover Insurance.
Diversification Opportunities for Linedata Services and Hanover Insurance
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Linedata and Hanover is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Linedata Services 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 Linedata Services SA 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 Linedata Services i.e., Linedata Services and Hanover Insurance go up and down completely randomly.
Pair Corralation between Linedata Services and Hanover Insurance
Assuming the 90 days trading horizon Linedata Services SA is expected to generate 1.06 times more return on investment than Hanover Insurance. However, Linedata Services is 1.06 times more volatile than The Hanover Insurance. It trades about 0.14 of its potential returns per unit of risk. The Hanover Insurance is currently generating about -0.08 per unit of risk. If you would invest 8,040 in Linedata Services SA on October 16, 2024 and sell it today you would earn a total of 280.00 from holding Linedata Services SA or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linedata Services SA vs. The Hanover Insurance
Performance |
| Timeline |
| Linedata Services |
| Hanover Insurance |
Linedata Services and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linedata Services and Hanover Insurance
The main advantage of trading using opposite Linedata Services and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services 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.| Linedata Services vs. Sunny Optical Technology | Linedata Services vs. Digilife Technologies Limited | Linedata Services vs. ASPEN TECHINC DL | Linedata Services vs. SILVER BULLET DATA |
| Hanover Insurance vs. EPSILON HEALTHCARE LTD | Hanover Insurance vs. OPKO HEALTH | Hanover Insurance vs. Park Hotels Resorts | Hanover Insurance vs. Dalata Hotel Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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