Correlation Between WiMi Hologram and Hanover Insurance

Can any of the company-specific risk be diversified away by investing in both WiMi Hologram 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 WiMi Hologram and Hanover Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WiMi Hologram Cloud and The Hanover Insurance, you can compare the effects of market volatilities on WiMi Hologram 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 WiMi Hologram with a short position of Hanover Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiMi Hologram and Hanover Insurance.

Diversification Opportunities for WiMi Hologram and Hanover Insurance

-0.62

Correlation Coefficient

WiMi Hologram  Hanover Insurance

Excellent diversification

The 3 months correlation between WiMi and Hanover is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding WiMi Hologram Cloud and The Hanover Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Insurance and WiMi Hologram 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 WiMi Hologram Cloud 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 WiMi Hologram i.e., WiMi Hologram and Hanover Insurance go up and down completely randomly.

Pair Corralation between WiMi Hologram and Hanover Insurance

Given the investment horizon of 90 days WiMi Hologram Cloud is expected to under-perform the Hanover Insurance. In addition to that, WiMi Hologram is 6.71 times more volatile than The Hanover Insurance. It trades about -0.1 of its total potential returns per unit of risk. The Hanover Insurance is currently generating about 0.14 per unit of volatility. If you would invest  15,350  in The Hanover Insurance on December 27, 2024 and sell it today you would earn a total of  2,094  from holding The Hanover Insurance or generate 13.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

WiMi Hologram Cloud  vs.  The Hanover Insurance

WiMi Hologram Cloud

Risk-Adjusted Performance

Very Weak

Over the last 90 days WiMi Hologram Cloud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Hanover Insurance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hanover Insurance are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical indicators, Hanover Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WiMi Hologram and Hanover Insurance

The main advantage of trading using opposite WiMi Hologram and Hanover Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiMi Hologram 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.

The idea behind WiMi Hologram Cloud and The Hanover Insurance 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.