Correlation Between Yokohama Rubber and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both Yokohama Rubber 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 Yokohama Rubber and HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Yokohama Rubber and HANOVER INSURANCE, you can compare the effects of market volatilities on Yokohama Rubber 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 Yokohama Rubber with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokohama Rubber and HANOVER INSURANCE.
Diversification Opportunities for Yokohama Rubber and HANOVER INSURANCE
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yokohama and HANOVER is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Yokohama Rubber and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE and Yokohama Rubber 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 The Yokohama Rubber 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 Yokohama Rubber i.e., Yokohama Rubber and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between Yokohama Rubber and HANOVER INSURANCE
Assuming the 90 days trading horizon The Yokohama Rubber is expected to under-perform the HANOVER INSURANCE. In addition to that, Yokohama Rubber is 1.72 times more volatile than HANOVER INSURANCE. It trades about -0.05 of its total potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.15 per unit of volatility. If you would invest 11,635 in HANOVER INSURANCE on August 29, 2024 and sell it today you would earn a total of 3,565 from holding HANOVER INSURANCE or generate 30.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Yokohama Rubber vs. HANOVER INSURANCE
Performance |
| Timeline |
| Yokohama Rubber |
| HANOVER INSURANCE |
Yokohama Rubber and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yokohama Rubber and HANOVER INSURANCE
The main advantage of trading using opposite Yokohama Rubber and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokohama Rubber 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.| Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Apple Inc | Yokohama Rubber vs. Superior Plus Corp | Yokohama Rubber vs. SIVERS SEMICONDUCTORS AB |
| HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Apple Inc | HANOVER INSURANCE vs. Superior Plus Corp | HANOVER INSURANCE vs. SIVERS SEMICONDUCTORS AB |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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