Correlation Between Hanover Insurance and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and NioCorp Developments 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 NioCorp Developments 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 NioCorp Developments Ltd, you can compare the effects of market volatilities on Hanover Insurance and NioCorp Developments 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 NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and NioCorp Developments.
Diversification Opportunities for Hanover Insurance and NioCorp Developments
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanover and NioCorp is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and NioCorp Developments go up and down completely randomly.
Pair Corralation between Hanover Insurance and NioCorp Developments
Considering the 90-day investment horizon The Hanover Insurance is expected to generate 0.34 times more return on investment than NioCorp Developments. However, The Hanover Insurance is 2.93 times less risky than NioCorp Developments. It trades about 0.39 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about -0.37 per unit of risk. If you would invest 14,833 in The Hanover Insurance on September 1, 2024 and sell it today you would earn a total of 1,668 from holding The Hanover Insurance or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. NioCorp Developments Ltd
Performance |
| Timeline |
| Hanover Insurance |
| NioCorp Developments |
Hanover Insurance and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and NioCorp Developments
The main advantage of trading using opposite Hanover Insurance and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' long position.| Hanover Insurance vs. Selective Insurance Group | Hanover Insurance vs. Aquagold International | Hanover Insurance vs. Thrivent High Yield | Hanover Insurance vs. Morningstar Unconstrained Allocation |
| NioCorp Developments vs. Paiute Oil Mining | NioCorp Developments vs. Marfrig Global Foods | NioCorp Developments vs. Emerson Radio | NioCorp Developments vs. Reservoir Media |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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