Correlation Between Hanover Insurance and Apollomics

Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Apollomics 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 Apollomics 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 Apollomics Class A, you can compare the effects of market volatilities on Hanover Insurance and Apollomics 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 Apollomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Apollomics.

Diversification Opportunities for Hanover Insurance and Apollomics

-0.43

Correlation Coefficient

Hanover Insurance  Apollomics

Very good diversification

The 3 months correlation between Hanover and Apollomics is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Apollomics Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollomics Class A 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 Apollomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollomics Class A has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Apollomics go up and down completely randomly.

Pair Corralation between Hanover Insurance and Apollomics

Considering the 90-day investment horizon The Hanover Insurance is expected to under-perform the Apollomics. But the stock apears to be less risky and, when comparing its historical volatility, The Hanover Insurance is 9.94 times less risky than Apollomics. The stock trades about -0.21 of its potential returns per unit of risk. The Apollomics Class A is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  890.00  in Apollomics Class A on September 29, 2024 and sell it today you would earn a total of  98.00  from holding Apollomics Class A or generate 11.01% 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.  Apollomics Class A

Hanover Insurance

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Hanover Insurance are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical indicators, Hanover Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Apollomics Class A

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apollomics Class A are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Apollomics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanover Insurance and Apollomics

The main advantage of trading using opposite Hanover Insurance and Apollomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Apollomics 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 Apollomics will offset losses from the drop in Apollomics' long position.

The idea behind The Hanover Insurance and Apollomics Class A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.