Correlation Between Infrastrutture Wireless and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Infrastrutture Wireless 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 Infrastrutture Wireless and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infrastrutture Wireless Italiane and The Hanover Insurance, you can compare the effects of market volatilities on Infrastrutture Wireless 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 Infrastrutture Wireless with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infrastrutture Wireless and Hanover Insurance.
Diversification Opportunities for Infrastrutture Wireless and Hanover Insurance
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Infrastrutture and Hanover is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Infrastrutture Wireless Italia and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Infrastrutture Wireless 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 Infrastrutture Wireless Italiane 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 Infrastrutture Wireless i.e., Infrastrutture Wireless and Hanover Insurance go up and down completely randomly.
Pair Corralation between Infrastrutture Wireless and Hanover Insurance
Assuming the 90 days horizon Infrastrutture Wireless Italiane is expected to under-perform the Hanover Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Infrastrutture Wireless Italiane is 1.44 times less risky than Hanover Insurance. The stock trades about -0.16 of its potential returns per unit of risk. The The Hanover Insurance is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 13,014 in The Hanover Insurance on August 31, 2024 and sell it today you would earn a total of 2,386 from holding The Hanover Insurance or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infrastrutture Wireless Italia vs. The Hanover Insurance
Performance |
| Timeline |
| Infrastrutture Wireless |
| Hanover Insurance |
Infrastrutture Wireless and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infrastrutture Wireless and Hanover Insurance
The main advantage of trading using opposite Infrastrutture Wireless and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infrastrutture Wireless 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.| Infrastrutture Wireless vs. FARO Technologies | Infrastrutture Wireless vs. Digilife Technologies Limited | Infrastrutture Wireless vs. Silicon Motion Technology | Infrastrutture Wireless vs. Mitsui Chemicals |
| Hanover Insurance vs. Pentair plc | Hanover Insurance vs. AIR LIQUIDE ADR | Hanover Insurance vs. Norwegian Air Shuttle | Hanover Insurance vs. Computer And Technologies |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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