Correlation Between Nextplat Corp and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Nextplat Corp 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 Nextplat Corp and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextplat Corp and The Hanover Insurance, you can compare the effects of market volatilities on Nextplat Corp 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 Nextplat Corp with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextplat Corp and Hanover Insurance.
Diversification Opportunities for Nextplat Corp and Hanover Insurance
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nextplat and Hanover is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Nextplat Corp 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 Nextplat Corp 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 Nextplat Corp i.e., Nextplat Corp and Hanover Insurance go up and down completely randomly.
Pair Corralation between Nextplat Corp and Hanover Insurance
Given the investment horizon of 90 days Nextplat Corp is expected to under-perform the Hanover Insurance. In addition to that, Nextplat Corp is 2.77 times more volatile than The Hanover Insurance. It trades about -0.02 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about 0.12 per unit of volatility. If you would invest 15,628 in The Hanover Insurance on November 18, 2024 and sell it today you would earn a total of 638.00 from holding The Hanover Insurance or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextplat Corp vs. The Hanover Insurance
Performance |
| Timeline |
| Nextplat Corp |
| Hanover Insurance |
Nextplat Corp and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextplat Corp and Hanover Insurance
The main advantage of trading using opposite Nextplat Corp and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextplat Corp 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.| Nextplat Corp vs. RenoWorks Software | Nextplat Corp vs. LifeSpeak | Nextplat Corp vs. 01 Communique Laboratory | Nextplat Corp vs. Where Food Comes |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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