Correlation Between NTG Nordic and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both NTG Nordic 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 NTG Nordic and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NTG Nordic Transport and The Hanover Insurance, you can compare the effects of market volatilities on NTG Nordic 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 NTG Nordic with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Hanover Insurance.
Diversification Opportunities for NTG Nordic and Hanover Insurance
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between NTG and Hanover is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and NTG Nordic 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 NTG Nordic Transport 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 NTG Nordic i.e., NTG Nordic and Hanover Insurance go up and down completely randomly.
Pair Corralation between NTG Nordic and Hanover Insurance
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Hanover Insurance. In addition to that, NTG Nordic is 1.16 times more volatile than The Hanover Insurance. It trades about -0.24 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about -0.06 per unit of volatility. If you would invest 14,600 in The Hanover Insurance on October 30, 2024 and sell it today you would lose (300.00) from holding The Hanover Insurance or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. The Hanover Insurance
Performance |
| Timeline |
| NTG Nordic Transport |
| Hanover Insurance |
NTG Nordic and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Hanover Insurance
The main advantage of trading using opposite NTG Nordic and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic 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.| NTG Nordic vs. Coor Service Management | NTG Nordic vs. Daito Trust Construction | NTG Nordic vs. Corporate Travel Management | NTG Nordic vs. Platinum Investment Management |
| Hanover Insurance vs. EPSILON HEALTHCARE LTD | Hanover Insurance vs. NAGOYA RAILROAD | Hanover Insurance vs. SAFEROADS HLDGS | Hanover Insurance vs. PURETECH HEALTH 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 Stocks Directory module to find actively traded stocks across global markets.
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