Correlation Between Hanover Insurance and Safe Pro
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Safe Pro 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 Safe Pro 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 Safe Pro Group, you can compare the effects of market volatilities on Hanover Insurance and Safe Pro 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 Safe Pro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Safe Pro.
Diversification Opportunities for Hanover Insurance and Safe Pro
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanover and Safe is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Safe Pro Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Pro Group 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 Safe Pro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Pro Group has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Safe Pro go up and down completely randomly.
Pair Corralation between Hanover Insurance and Safe Pro
Considering the 90-day investment horizon Hanover Insurance is expected to generate 9.38 times less return on investment than Safe Pro. But when comparing it to its historical volatility, The Hanover Insurance is 10.14 times less risky than Safe Pro. It trades about 0.27 of its potential returns per unit of risk. Safe Pro Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 218.00 in Safe Pro Group on August 31, 2024 and sell it today you would earn a total of 178.00 from holding Safe Pro Group or generate 81.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hanover Insurance vs. Safe Pro Group
Performance |
| Timeline |
| Hanover Insurance |
| Safe Pro Group |
Hanover Insurance and Safe Pro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and Safe Pro
The main advantage of trading using opposite Hanover Insurance and Safe Pro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Safe Pro 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 Safe Pro will offset losses from the drop in Safe Pro's long position.| Hanover Insurance vs. Horace Mann Educators | Hanover Insurance vs. Kemper | Hanover Insurance vs. RLI Corp | Hanover Insurance vs. Global Indemnity PLC |
| Safe Pro vs. United Utilities Group | Safe Pro vs. CenterPoint Energy | Safe Pro vs. Pinterest | Safe Pro vs. Southwest Gas 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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