Correlation Between Hanover Insurance and First Republic
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and First Republic 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 First Republic 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 First Republic Bank, you can compare the effects of market volatilities on Hanover Insurance and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and First Republic.
Diversification Opportunities for Hanover Insurance and First Republic
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanover and First is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and First Republic go up and down completely randomly.
Pair Corralation between Hanover Insurance and First Republic
If you would invest 14,834 in The Hanover Insurance on August 30, 2024 and sell it today you would earn a total of 1,593 from holding The Hanover Insurance or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
The Hanover Insurance vs. First Republic Bank
Performance |
| Timeline |
| Hanover Insurance |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hanover Insurance and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and First Republic
The main advantage of trading using opposite Hanover Insurance and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| Hanover Insurance vs. Axa Equitable Holdings | Hanover Insurance vs. American International Group | Hanover Insurance vs. Arch Capital Group | Hanover Insurance vs. Sun Life Financial |
| First Republic vs. Cincinnati Financial | First Republic vs. Fernhill Beverage | First Republic vs. National Beverage Corp | First Republic vs. QBE Insurance Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |