Correlation Between Virtus Investment and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Virtus Investment and Hanover Insurance 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 Virtus Investment and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Investment Partners and The Hanover Insurance, you can compare the effects of market volatilities on Virtus Investment 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 Virtus Investment with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Investment and Hanover Insurance.
Diversification Opportunities for Virtus Investment and Hanover Insurance
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Hanover is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Virtus Investment 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 Virtus Investment Partners 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 Virtus Investment i.e., Virtus Investment and Hanover Insurance go up and down completely randomly.
Pair Corralation between Virtus Investment and Hanover Insurance
Assuming the 90 days horizon Virtus Investment Partners is expected to generate 1.44 times more return on investment than Hanover Insurance. However, Virtus Investment is 1.44 times more volatile than The Hanover Insurance. It trades about 0.28 of its potential returns per unit of risk. The Hanover Insurance is currently generating about 0.38 per unit of risk. If you would invest 20,200 in Virtus Investment Partners on September 1, 2024 and sell it today you would earn a total of 3,200 from holding Virtus Investment Partners or generate 15.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Investment Partners vs. The Hanover Insurance
Performance |
| Timeline |
| Virtus Investment |
| Hanover Insurance |
Virtus Investment and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Investment and Hanover Insurance
The main advantage of trading using opposite Virtus Investment and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Investment 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.| Virtus Investment vs. MTI WIRELESS EDGE | Virtus Investment vs. REGAL ASIAN INVESTMENTS | Virtus Investment vs. SLR Investment Corp | Virtus Investment vs. AOYAMA TRADING |
| Hanover Insurance vs. National Beverage Corp | Hanover Insurance vs. United Breweries Co | Hanover Insurance vs. Sabra Health Care | Hanover Insurance vs. Clearside Biomedical |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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