Correlation Between HANOVER INSURANCE and ONEOK
Can any of the company-specific risk be diversified away by investing in both HANOVER INSURANCE and ONEOK 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 HANOVER INSURANCE and ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANOVER INSURANCE and ONEOK Inc, you can compare the effects of market volatilities on HANOVER INSURANCE and ONEOK 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 HANOVER INSURANCE with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANOVER INSURANCE and ONEOK.
Diversification Opportunities for HANOVER INSURANCE and ONEOK
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HANOVER and ONEOK is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding HANOVER INSURANCE and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and HANOVER INSURANCE 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 HANOVER INSURANCE are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of HANOVER INSURANCE i.e., HANOVER INSURANCE and ONEOK go up and down completely randomly.
Pair Corralation between HANOVER INSURANCE and ONEOK
Assuming the 90 days trading horizon HANOVER INSURANCE is expected to generate 0.8 times more return on investment than ONEOK. However, HANOVER INSURANCE is 1.25 times less risky than ONEOK. It trades about 0.04 of its potential returns per unit of risk. ONEOK Inc is currently generating about -0.12 per unit of risk. If you would invest 15,008 in HANOVER INSURANCE on December 7, 2024 and sell it today you would earn a total of 492.00 from holding HANOVER INSURANCE or generate 3.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
HANOVER INSURANCE vs. ONEOK Inc
Performance |
Timeline |
HANOVER INSURANCE |
ONEOK Inc |
HANOVER INSURANCE and ONEOK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HANOVER INSURANCE and ONEOK
The main advantage of trading using opposite HANOVER INSURANCE and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANOVER INSURANCE position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.HANOVER INSURANCE vs. Micron Technology | HANOVER INSURANCE vs. SWISS WATER DECAFFCOFFEE | HANOVER INSURANCE vs. Iridium Communications | HANOVER INSURANCE vs. INTERSHOP Communications Aktiengesellschaft |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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