Correlation Between Hanover Insurance and International Media
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and International Media 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 International Media 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 International Media Acquisition, you can compare the effects of market volatilities on Hanover Insurance and International Media 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 International Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and International Media.
Diversification Opportunities for Hanover Insurance and International Media
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanover and International is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and International Media Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Media 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 International Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Media has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and International Media go up and down completely randomly.
Pair Corralation between Hanover Insurance and International Media
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 Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
The Hanover Insurance vs. International Media Acquisitio
Performance |
| Timeline |
| Hanover Insurance |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hanover Insurance and International Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and International Media
The main advantage of trading using opposite Hanover Insurance and International Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, International Media 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 International Media will offset losses from the drop in International Media's long position.| Hanover Insurance vs. Horace Mann Educators | Hanover Insurance vs. Kemper | Hanover Insurance vs. RLI Corp | Hanover Insurance vs. Global Indemnity PLC |
| International Media vs. Old Dominion Freight | International Media vs. CDW Corp | International Media vs. Verra Mobility Corp | International Media vs. Hooker Furniture |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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