Correlation Between ONEOK and Hanover Insurance
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By analyzing existing cross correlation between ONEOK INC NEW and The Hanover Insurance, you can compare the effects of market volatilities on ONEOK and Hanover Insurance 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 ONEOK with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Hanover Insurance.
Diversification Opportunities for ONEOK and Hanover Insurance
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ONEOK and Hanover is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK INC NEW and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and ONEOK 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 ONEOK INC NEW are associated (or correlated) with Hanover Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover Insurance has no effect on the direction of ONEOK i.e., ONEOK and Hanover Insurance go up and down completely randomly.
Pair Corralation between ONEOK and Hanover Insurance
Assuming the 90 days trading horizon ONEOK INC NEW is expected to under-perform the Hanover Insurance. In addition to that, ONEOK is 1.19 times more volatile than The Hanover Insurance. It trades about -0.15 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about 0.35 per unit of volatility. If you would invest 14,714 in The Hanover Insurance on September 4, 2024 and sell it today you would earn a total of 1,538 from holding The Hanover Insurance or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
ONEOK INC NEW vs. The Hanover Insurance
Performance |
| Timeline |
| ONEOK INC NEW |
| Hanover Insurance |
ONEOK and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and Hanover Insurance
The main advantage of trading using opposite ONEOK and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, Hanover Insurance 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 Hanover Insurance will offset losses from the drop in Hanover Insurance's long position.The idea behind ONEOK INC NEW and The Hanover Insurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hanover Insurance vs. Horace Mann Educators | Hanover Insurance vs. Kemper | Hanover Insurance vs. RLI Corp | Hanover Insurance vs. Global Indemnity PLC |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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