Correlation Between Hanover Insurance and Femasys

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Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Femasys 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 Femasys 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 Femasys, you can compare the effects of market volatilities on Hanover Insurance and Femasys 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 Femasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Femasys.

Diversification Opportunities for Hanover Insurance and Femasys

-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hanover and Femasys is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Femasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Femasys 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 Femasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Femasys has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Femasys go up and down completely randomly.

Pair Corralation between Hanover Insurance and Femasys

Considering the 90-day investment horizon The Hanover Insurance is expected to under-perform the Femasys. But the stock apears to be less risky and, when comparing its historical volatility, The Hanover Insurance is 4.93 times less risky than Femasys. The stock trades about -0.17 of its potential returns per unit of risk. The Femasys is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  117.00  in Femasys on September 12, 2024 and sell it today you would earn a total of  7.00  from holding Femasys or generate 5.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

The Hanover Insurance  vs.  Femasys

 Performance 
       Timeline  
Hanover Insurance 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in The Hanover Insurance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Hanover Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Femasys 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Femasys are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Femasys showed solid returns over the last few months and may actually be approaching a breakup point.

Hanover Insurance and Femasys Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hanover Insurance and Femasys

The main advantage of trading using opposite Hanover Insurance and Femasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Femasys 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 Femasys will offset losses from the drop in Femasys' long position.
The idea behind The Hanover Insurance and Femasys pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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