Correlation Between Hanover Insurance and AMERICAN
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By analyzing existing cross correlation between The Hanover Insurance and AMERICAN HOMES 4, you can compare the effects of market volatilities on Hanover Insurance and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and AMERICAN.
Diversification Opportunities for Hanover Insurance and AMERICAN
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanover and AMERICAN is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and AMERICAN HOMES 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN HOMES 4 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN HOMES 4 has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and AMERICAN go up and down completely randomly.
Pair Corralation between Hanover Insurance and AMERICAN
Considering the 90-day investment horizon The Hanover Insurance is expected to generate 1.69 times more return on investment than AMERICAN. However, Hanover Insurance is 1.69 times more volatile than AMERICAN HOMES 4. It trades about 0.11 of its potential returns per unit of risk. AMERICAN HOMES 4 is currently generating about 0.02 per unit of risk. If you would invest 10,266 in The Hanover Insurance on September 12, 2024 and sell it today you would earn a total of 5,330 from holding The Hanover Insurance or generate 51.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.17% |
| Values | Daily Returns |
The Hanover Insurance vs. AMERICAN HOMES 4
Performance |
| Timeline |
| Hanover Insurance |
| AMERICAN HOMES 4 |
Hanover Insurance and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanover Insurance and AMERICAN
The main advantage of trading using opposite Hanover Insurance and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| Hanover Insurance vs. Aeye Inc | Hanover Insurance vs. Ep Emerging Markets | Hanover Insurance vs. LiCycle Holdings Corp | Hanover Insurance vs. SEI Investments |
| AMERICAN vs. ICC Holdings | AMERICAN vs. United Fire Group | AMERICAN vs. QBE Insurance Group | AMERICAN vs. The Hanover Insurance |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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