Correlation Between Hanover Insurance and Old Republic
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Old Republic 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 Old Republic 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 Old Republic International, you can compare the effects of market volatilities on Hanover Insurance and Old Republic 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 Old Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Old Republic.
Diversification Opportunities for Hanover Insurance and Old Republic
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hanover and Old is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Old Republic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Republic Interna 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 Old Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Republic Interna has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Old Republic go up and down completely randomly.
Pair Corralation between Hanover Insurance and Old Republic
Considering the 90-day investment horizon Hanover Insurance is expected to generate 2.12 times less return on investment than Old Republic. In addition to that, Hanover Insurance is 1.13 times more volatile than Old Republic International. It trades about 0.04 of its total potential returns per unit of risk. Old Republic International is currently generating about 0.1 per unit of volatility. If you would invest 2,256 in Old Republic International on September 2, 2024 and sell it today you would earn a total of 1,641 from holding Old Republic International or generate 72.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Old Republic International
Performance |
| Timeline |
| Hanover Insurance |
| Old Republic Interna |
Hanover Insurance and Old Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Old Republic
The main advantage of trading using opposite Hanover Insurance and Old Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Old Republic 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 Old Republic will offset losses from the drop in Old Republic's 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 |
| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |