Correlation Between SPARTAN STORES and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES 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 SPARTAN STORES and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and The Hanover Insurance, you can compare the effects of market volatilities on SPARTAN STORES 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 SPARTAN STORES with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Hanover Insurance.
Diversification Opportunities for SPARTAN STORES and Hanover Insurance
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPARTAN and Hanover is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES i.e., SPARTAN STORES and Hanover Insurance go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Hanover Insurance
Assuming the 90 days trading horizon SPARTAN STORES is expected to under-perform the Hanover Insurance. In addition to that, SPARTAN STORES is 1.62 times more volatile than The Hanover Insurance. It trades about -0.11 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about 0.04 per unit of volatility. If you would invest 14,311 in The Hanover Insurance on November 7, 2024 and sell it today you would earn a total of 389.00 from holding The Hanover Insurance or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. The Hanover Insurance
Performance |
| Timeline |
| SPARTAN STORES |
| Hanover Insurance |
SPARTAN STORES and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and Hanover Insurance
The main advantage of trading using opposite SPARTAN STORES and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES 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.| SPARTAN STORES vs. ALERION CLEANPOWER | SPARTAN STORES vs. Performance Food Group | SPARTAN STORES vs. Cairo Communication SpA | SPARTAN STORES vs. ULTRA CLEAN HLDGS |
| Hanover Insurance vs. Siamgas And Petrochemicals | Hanover Insurance vs. China Resources Beer | Hanover Insurance vs. EITZEN CHEMICALS | Hanover Insurance vs. MOLSON RS BEVERAGE |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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