Correlation Between Hanover Insurance and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Aspen 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 Hanover Insurance and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hanover Insurance and Aspen Insurance Holdings, you can compare the effects of market volatilities on Hanover Insurance and Aspen 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 Hanover Insurance with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Aspen Insurance.
Diversification Opportunities for Hanover Insurance and Aspen Insurance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanover and Aspen is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Aspen Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Insurance Holdings and Hanover Insurance 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 The Hanover Insurance are associated (or correlated) with Aspen Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Insurance Holdings has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Aspen Insurance go up and down completely randomly.
Pair Corralation between Hanover Insurance and Aspen Insurance
Considering the 90-day investment horizon The Hanover Insurance is expected to generate 0.87 times more return on investment than Aspen Insurance. However, The Hanover Insurance is 1.15 times less risky than Aspen Insurance. It trades about 0.26 of its potential returns per unit of risk. Aspen Insurance Holdings is currently generating about 0.08 per unit of risk. If you would invest 14,915 in The Hanover Insurance on August 28, 2024 and sell it today you would earn a total of 1,258 from holding The Hanover Insurance or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Hanover Insurance |
| Aspen Insurance Holdings |
Hanover Insurance and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Aspen Insurance
The main advantage of trading using opposite Hanover Insurance and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Aspen 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 Aspen Insurance will offset losses from the drop in Aspen Insurance's long position.| Hanover Insurance vs. Fiverr International | Hanover Insurance vs. Pinterest | Hanover Insurance vs. Upstart Holdings | Hanover Insurance vs. Fastly Inc |
| Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. Selective Insurance Group | Aspen Insurance vs. The Allstate | Aspen Insurance vs. AmTrust Financial Services |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |