Correlation Between Hanover Insurance and Mills Music
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Mills Music 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 Mills Music 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 Mills Music Trust, you can compare the effects of market volatilities on Hanover Insurance and Mills Music 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 Mills Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Mills Music.
Diversification Opportunities for Hanover Insurance and Mills Music
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanover and Mills is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Mills Music Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mills Music Trust 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 Mills Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mills Music Trust has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Mills Music go up and down completely randomly.
Pair Corralation between Hanover Insurance and Mills Music
Considering the 90-day investment horizon The Hanover Insurance is expected to generate 1.18 times more return on investment than Mills Music. However, Hanover Insurance is 1.18 times more volatile than Mills Music Trust. It trades about 0.32 of its potential returns per unit of risk. Mills Music Trust is currently generating about 0.2 per unit of risk. 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Mills Music Trust
Performance |
| Timeline |
| Hanover Insurance |
| Mills Music Trust |
Hanover Insurance and Mills Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Mills Music
The main advantage of trading using opposite Hanover Insurance and Mills Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Mills Music 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 Mills Music will offset losses from the drop in Mills Music'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 |
| Mills Music vs. Citrine Global Corp | Mills Music vs. Blue Water Ventures | Mills Music vs. DATA Communications Management | Mills Music vs. Aramark Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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