Correlation Between Hanover Insurance and Inflection Point
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Inflection Point 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 Inflection Point 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 Inflection Point Acquisition, you can compare the effects of market volatilities on Hanover Insurance and Inflection Point 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 Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Inflection Point.
Diversification Opportunities for Hanover Insurance and Inflection Point
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanover and Inflection is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Inflection Point go up and down completely randomly.
Pair Corralation between Hanover Insurance and Inflection Point
Considering the 90-day investment horizon Hanover Insurance is expected to generate 49.78 times less return on investment than Inflection Point. But when comparing it to its historical volatility, The Hanover Insurance is 37.82 times less risky than Inflection Point. It trades about 0.04 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Inflection Point Acquisition on August 30, 2024 and sell it today you would earn a total of 1,086 from holding Inflection Point Acquisition or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.02% |
| Values | Daily Returns |
The Hanover Insurance vs. Inflection Point Acquisition
Performance |
| Timeline |
| Hanover Insurance |
| Inflection Point Acq |
Hanover Insurance and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Inflection Point
The main advantage of trading using opposite Hanover Insurance and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point'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 |
| Inflection Point vs. ClimateRock Class A | Inflection Point vs. CF Acquisition VII | Inflection Point vs. DP Cap Acquisition |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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