Correlation Between Vienna Insurance and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance 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 Vienna Insurance and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vienna Insurance Group and The Hanover Insurance, you can compare the effects of market volatilities on Vienna Insurance 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 Vienna Insurance with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Hanover Insurance.
Diversification Opportunities for Vienna Insurance and Hanover Insurance
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vienna and Hanover is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Vienna 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 Vienna Insurance Group 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 Vienna Insurance i.e., Vienna Insurance and Hanover Insurance go up and down completely randomly.
Pair Corralation between Vienna Insurance and Hanover Insurance
Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.63 times more return on investment than Hanover Insurance. However, Vienna Insurance Group is 1.6 times less risky than Hanover Insurance. It trades about 0.21 of its potential returns per unit of risk. The Hanover Insurance is currently generating about 0.0 per unit of risk. If you would invest 2,955 in Vienna Insurance Group on October 11, 2024 and sell it today you would earn a total of 90.00 from holding Vienna Insurance Group or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vienna Insurance Group vs. The Hanover Insurance
Performance |
| Timeline |
| Vienna Insurance |
| Hanover Insurance |
Vienna Insurance and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and Hanover Insurance
The main advantage of trading using opposite Vienna Insurance and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance 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.| Vienna Insurance vs. Tyson Foods | Vienna Insurance vs. United Natural Foods | Vienna Insurance vs. PLANT VEDA FOODS | Vienna Insurance vs. UNIDOC HEALTH P |
| Hanover Insurance vs. ZhongAn Online P | Hanover Insurance vs. BOS BETTER ONLINE | Hanover Insurance vs. G III Apparel Group | Hanover Insurance vs. Transport International 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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