Correlation Between Hanover Insurance and Capital Clean
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Capital Clean 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 Capital Clean 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 Capital Clean Energy, you can compare the effects of market volatilities on Hanover Insurance and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Capital Clean.
Diversification Opportunities for Hanover Insurance and Capital Clean
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanover and Capital is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Capital Clean go up and down completely randomly.
Pair Corralation between Hanover Insurance and Capital Clean
Considering the 90-day investment horizon The Hanover Insurance is expected to generate 0.65 times more return on investment than Capital Clean. However, The Hanover Insurance is 1.54 times less risky than Capital Clean. It trades about 0.09 of its potential returns per unit of risk. Capital Clean Energy is currently generating about 0.06 per unit of risk. If you would invest 10,834 in The Hanover Insurance on August 27, 2024 and sell it today you would earn a total of 5,526 from holding The Hanover Insurance or generate 51.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Capital Clean Energy
Performance |
| Timeline |
| Hanover Insurance |
| Capital Clean Energy |
Hanover Insurance and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Capital Clean
The main advantage of trading using opposite Hanover Insurance and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.| Hanover Insurance vs. Horace Mann Educators | Hanover Insurance vs. Kemper | Hanover Insurance vs. RLI Corp | Hanover Insurance vs. Global Indemnity PLC |
| Capital Clean vs. Star Bulk Carriers | Capital Clean vs. TOP Ships | Capital Clean vs. Seanergy Maritime Holdings | Capital Clean vs. Performance Shipping |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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