Correlation Between Semtech and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Semtech 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 Semtech and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semtech and The Hanover Insurance, you can compare the effects of market volatilities on Semtech 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 Semtech with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semtech and Hanover Insurance.
Diversification Opportunities for Semtech and Hanover Insurance
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Semtech and Hanover is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Semtech and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Semtech 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 Semtech 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 Semtech i.e., Semtech and Hanover Insurance go up and down completely randomly.
Pair Corralation between Semtech and Hanover Insurance
Given the investment horizon of 90 days Semtech is expected to generate 3.86 times more return on investment than Hanover Insurance. However, Semtech is 3.86 times more volatile than The Hanover Insurance. It trades about 0.41 of its potential returns per unit of risk. The Hanover Insurance is currently generating about 0.35 per unit of risk. If you would invest 4,392 in Semtech on September 4, 2024 and sell it today you would earn a total of 2,303 from holding Semtech or generate 52.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semtech vs. The Hanover Insurance
Performance |
| Timeline |
| Semtech |
| Hanover Insurance |
Semtech and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semtech and Hanover Insurance
The main advantage of trading using opposite Semtech and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semtech 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.| Semtech vs. Power Integrations | Semtech vs. Diodes Incorporated | Semtech vs. MACOM Technology Solutions | Semtech vs. Cirrus Logic |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |