Correlation Between Insurance Australia and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both Insurance Australia 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 Insurance Australia and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insurance Australia Group and HANOVER INSURANCE, you can compare the effects of market volatilities on Insurance Australia 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 Insurance Australia with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and HANOVER INSURANCE.
Diversification Opportunities for Insurance Australia and HANOVER INSURANCE
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Insurance and HANOVER is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and Insurance Australia 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 Insurance Australia Group 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 Insurance Australia i.e., Insurance Australia and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between Insurance Australia and HANOVER INSURANCE
Assuming the 90 days horizon Insurance Australia Group is expected to generate 0.8 times more return on investment than HANOVER INSURANCE. However, Insurance Australia Group is 1.26 times less risky than HANOVER INSURANCE. It trades about 0.05 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about -0.2 per unit of risk. If you would invest 434.00 in Insurance Australia Group on January 22, 2025 and sell it today you would earn a total of 8.00 from holding Insurance Australia Group or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. HANOVER INSURANCE
Performance |
| Timeline |
| Insurance Australia |
| HANOVER INSURANCE |
Insurance Australia and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and HANOVER INSURANCE
The main advantage of trading using opposite Insurance Australia and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia 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.| Insurance Australia vs. The Progressive | Insurance Australia vs. The Allstate | Insurance Australia vs. Fairfax Financial Holdings | Insurance Australia vs. QBE Insurance Group |
| HANOVER INSURANCE vs. CREDIT AGRICOLE | HANOVER INSURANCE vs. UNIQA INSURANCE GR | HANOVER INSURANCE vs. CHIBA BANK | HANOVER INSURANCE vs. Virtu Financial |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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