Correlation Between AS Tallink and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both AS Tallink 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 AS Tallink and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AS Tallink Grupp and The Hanover Insurance, you can compare the effects of market volatilities on AS Tallink 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 AS Tallink with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of AS Tallink and Hanover Insurance.
Diversification Opportunities for AS Tallink and Hanover Insurance
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between T5N and Hanover is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AS Tallink Grupp and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and AS Tallink 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 AS Tallink Grupp 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 AS Tallink i.e., AS Tallink and Hanover Insurance go up and down completely randomly.
Pair Corralation between AS Tallink and Hanover Insurance
Assuming the 90 days horizon AS Tallink Grupp is expected to under-perform the Hanover Insurance. But the stock apears to be less risky and, when comparing its historical volatility, AS Tallink Grupp is 1.32 times less risky than Hanover Insurance. The stock trades about -0.05 of its potential returns per unit of risk. The The Hanover Insurance is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 13,700 in The Hanover Insurance on September 1, 2024 and sell it today you would earn a total of 2,100 from holding The Hanover Insurance or generate 15.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AS Tallink Grupp vs. The Hanover Insurance
Performance |
| Timeline |
| AS Tallink Grupp |
| Hanover Insurance |
AS Tallink and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AS Tallink and Hanover Insurance
The main advantage of trading using opposite AS Tallink and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AS Tallink 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.| AS Tallink vs. MYFAIR GOLD P | AS Tallink vs. FORMPIPE SOFTWARE AB | AS Tallink vs. HF SINCLAIR P | AS Tallink vs. VITEC SOFTWARE GROUP |
| Hanover Insurance vs. National Beverage Corp | Hanover Insurance vs. United Breweries Co | Hanover Insurance vs. Sabra Health Care | Hanover Insurance vs. Clearside Biomedical |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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