Correlation Between BANK HANDLOWY and Hanover Insurance
Can any of the company-specific risk be diversified away by investing in both BANK HANDLOWY 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 BANK HANDLOWY and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK HANDLOWY and The Hanover Insurance, you can compare the effects of market volatilities on BANK HANDLOWY 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 BANK HANDLOWY with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK HANDLOWY and Hanover Insurance.
Diversification Opportunities for BANK HANDLOWY and Hanover Insurance
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between BANK and Hanover is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding BANK HANDLOWY and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and BANK HANDLOWY 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 BANK HANDLOWY 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 BANK HANDLOWY i.e., BANK HANDLOWY and Hanover Insurance go up and down completely randomly.
Pair Corralation between BANK HANDLOWY and Hanover Insurance
Assuming the 90 days trading horizon BANK HANDLOWY is expected to under-perform the Hanover Insurance. But the stock apears to be less risky and, when comparing its historical volatility, BANK HANDLOWY is 1.74 times less risky than Hanover Insurance. The stock trades about -0.03 of its potential returns per unit of risk. The The Hanover Insurance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 14,227 in The Hanover Insurance on August 18, 2025 and sell it today you would earn a total of 1,173 from holding The Hanover Insurance or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK HANDLOWY vs. The Hanover Insurance
Performance |
| Timeline |
| BANK HANDLOWY |
| Hanover Insurance |
BANK HANDLOWY and Hanover Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK HANDLOWY and Hanover Insurance
The main advantage of trading using opposite BANK HANDLOWY and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK HANDLOWY 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.| BANK HANDLOWY vs. SMA Solar Technology | BANK HANDLOWY vs. SUN ART RETAIL | BANK HANDLOWY vs. ATOSS SOFTWARE | BANK HANDLOWY vs. COGNYTE SOFTWARE LTD |
| Hanover Insurance vs. SIVERS SEMICONDUCTORS AB | Hanover Insurance vs. NorAm Drilling AS | Hanover Insurance vs. BANK HANDLOWY | Hanover Insurance vs. Norsk Hydro ASA |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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