Correlation Between Hanover Insurance and Horace Mann
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Horace Mann 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 Horace Mann 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 Horace Mann Educators, you can compare the effects of market volatilities on Hanover Insurance and Horace Mann 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 Horace Mann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Horace Mann.
Diversification Opportunities for Hanover Insurance and Horace Mann
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanover and Horace is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Horace Mann Educators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horace Mann Educators 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 Horace Mann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horace Mann Educators has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Horace Mann go up and down completely randomly.
Pair Corralation between Hanover Insurance and Horace Mann
Considering the 90-day investment horizon The Hanover Insurance is expected to generate 1.04 times more return on investment than Horace Mann. However, Hanover Insurance is 1.04 times more volatile than Horace Mann Educators. It trades about 0.1 of its potential returns per unit of risk. Horace Mann Educators is currently generating about 0.03 per unit of risk. If you would invest 15,244 in The Hanover Insurance on November 2, 2024 and sell it today you would earn a total of 417.00 from holding The Hanover Insurance or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Horace Mann Educators
Performance |
| Timeline |
| Hanover Insurance |
| Horace Mann Educators |
Hanover Insurance and Horace Mann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Horace Mann
The main advantage of trading using opposite Hanover Insurance and Horace Mann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Horace Mann 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 Horace Mann will offset losses from the drop in Horace Mann's long position.| Hanover Insurance vs. Horace Mann Educators | Hanover Insurance vs. Kemper | Hanover Insurance vs. RLI Corp | Hanover Insurance vs. Global Indemnity PLC |
| Horace Mann vs. Kemper | Horace Mann vs. RLI Corp | Horace Mann vs. Global Indemnity PLC | Horace Mann vs. Argo Group International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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