Correlation Between Corporate Office and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both Corporate Office 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 Corporate Office and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Office Properties and HANOVER INSURANCE, you can compare the effects of market volatilities on Corporate Office 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 Corporate Office with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and HANOVER INSURANCE.
Diversification Opportunities for Corporate Office and HANOVER INSURANCE
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Corporate and HANOVER is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and Corporate Office 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 Corporate Office Properties 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 Corporate Office i.e., Corporate Office and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between Corporate Office and HANOVER INSURANCE
Assuming the 90 days horizon Corporate Office is expected to generate 2.31 times less return on investment than HANOVER INSURANCE. But when comparing it to its historical volatility, Corporate Office Properties is 1.04 times less risky than HANOVER INSURANCE. It trades about 0.16 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 13,400 in HANOVER INSURANCE on September 1, 2024 and sell it today you would earn a total of 1,800 from holding HANOVER INSURANCE or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. HANOVER INSURANCE
Performance |
| Timeline |
| Corporate Office Pro |
| HANOVER INSURANCE |
Corporate Office and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and HANOVER INSURANCE
The main advantage of trading using opposite Corporate Office and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office 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.| Corporate Office vs. Clean Energy Fuels | Corporate Office vs. BJs Restaurants | Corporate Office vs. FRACTAL GAMING GROUP | Corporate Office vs. ANGLER GAMING PLC |
| HANOVER INSURANCE vs. SIVERS SEMICONDUCTORS AB | HANOVER INSURANCE vs. Darden Restaurants | HANOVER INSURANCE vs. Reliance Steel Aluminum | HANOVER INSURANCE vs. Q2M Managementberatung AG |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |