Correlation Between Colas SA and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both Colas SA 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 Colas SA and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colas SA and The Hanover Insurance, you can compare the effects of market volatilities on Colas SA 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 Colas SA with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colas SA and Hanover Insurance.
Diversification Opportunities for Colas SA and Hanover Insurance
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Colas and Hanover is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Colas SA and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and Colas SA 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 Colas SA 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 Colas SA i.e., Colas SA and Hanover Insurance go up and down completely randomly.
Pair Corralation between Colas SA and Hanover Insurance
If you would invest 12,631 in The Hanover Insurance on January 20, 2024 and sell it today you would earn a total of 90.00 from holding The Hanover Insurance or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Colas SA vs. The Hanover Insurance
Performance |
| Timeline |
| Colas SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hanover Insurance |
Colas SA and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colas SA and Hanover Insurance
The main advantage of trading using opposite Colas SA and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colas SA 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.| Colas SA vs. Reinsurance Group of | Colas SA vs. Siriuspoint | Colas SA vs. Brookfield Reinsurance | Colas SA vs. RenaissanceRe 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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