Correlation Between CREDIT AGRICOLE and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both CREDIT AGRICOLE 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 CREDIT AGRICOLE and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CREDIT AGRICOLE and The Hanover Insurance, you can compare the effects of market volatilities on CREDIT AGRICOLE 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 CREDIT AGRICOLE with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREDIT AGRICOLE and Hanover Insurance.
Diversification Opportunities for CREDIT AGRICOLE and Hanover Insurance
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CREDIT and Hanover is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT AGRICOLE and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and CREDIT AGRICOLE 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 CREDIT AGRICOLE 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 CREDIT AGRICOLE i.e., CREDIT AGRICOLE and Hanover Insurance go up and down completely randomly.
Pair Corralation between CREDIT AGRICOLE and Hanover Insurance
Assuming the 90 days trading horizon CREDIT AGRICOLE is expected to under-perform the Hanover Insurance. But the stock apears to be less risky and, when comparing its historical volatility, CREDIT AGRICOLE is 1.14 times less risky than Hanover Insurance. The stock trades about -0.23 of its potential returns per unit of risk. The The Hanover Insurance is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 13,800 in The Hanover Insurance on August 25, 2024 and sell it today you would earn a total of 1,400 from holding The Hanover Insurance or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREDIT AGRICOLE vs. The Hanover Insurance
Performance |
| Timeline |
| CREDIT AGRICOLE |
| Hanover Insurance |
CREDIT AGRICOLE and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREDIT AGRICOLE and Hanover Insurance
The main advantage of trading using opposite CREDIT AGRICOLE and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREDIT AGRICOLE 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.| CREDIT AGRICOLE vs. Perseus Mining Limited | CREDIT AGRICOLE vs. SERI INDUSTRIAL EO | CREDIT AGRICOLE vs. GREENX METALS LTD | CREDIT AGRICOLE vs. XLMedia PLC |
| Hanover Insurance vs. The Peoples Insurance | Hanover Insurance vs. W R Berkley | Hanover Insurance vs. Loews Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |