Correlation Between Hanover Insurance and Delta Air
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Delta Air 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 Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hanover Insurance and Delta Air Lines, you can compare the effects of market volatilities on Hanover Insurance and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Delta Air.
Diversification Opportunities for Hanover Insurance and Delta Air
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanover and Delta is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 The Hanover Insurance are associated (or correlated) with Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Delta Air go up and down completely randomly.
Pair Corralation between Hanover Insurance and Delta Air
Assuming the 90 days horizon The Hanover Insurance is expected to generate 0.66 times more return on investment than Delta Air. However, The Hanover Insurance is 1.52 times less risky than Delta Air. It trades about 0.08 of its potential returns per unit of risk. Delta Air Lines is currently generating about -0.12 per unit of risk. If you would invest 14,523 in The Hanover Insurance on December 28, 2024 and sell it today you would earn a total of 1,377 from holding The Hanover Insurance or generate 9.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
The Hanover Insurance vs. Delta Air Lines
Performance |
Timeline |
Hanover Insurance |
Delta Air Lines |
Hanover Insurance and Delta Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanover Insurance and Delta Air
The main advantage of trading using opposite Hanover Insurance and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.Hanover Insurance vs. MARKET VECTR RETAIL | Hanover Insurance vs. TRADEGATE | Hanover Insurance vs. Virtu Financial | Hanover Insurance vs. Tradeweb Markets |
Delta Air vs. Value Management Research | Delta Air vs. Brockhaus Capital Management | Delta Air vs. X FAB Silicon Foundries | Delta Air vs. Firan Technology Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |