Correlation Between Hanover Insurance and CBRE Group

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

Diversification Opportunities for Hanover Insurance and CBRE Group

-0.46

Correlation Coefficient

Hanover Insurance  CBRE Group

Very good diversification

The 3 months correlation between Hanover and CBRE is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and CBRE Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBRE Group Class 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 CBRE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBRE Group Class has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and CBRE Group go up and down completely randomly.

Pair Corralation between Hanover Insurance and CBRE Group

Assuming the 90 days horizon The Hanover Insurance is expected to under-perform the CBRE Group. In addition to that, Hanover Insurance is 1.03 times more volatile than CBRE Group Class. It trades about -0.01 of its total potential returns per unit of risk. CBRE Group Class is currently generating about 0.12 per unit of volatility. If you would invest  10,800  in CBRE Group Class on April 25, 2025 and sell it today you would earn a total of  1,400  from holding CBRE Group Class or generate 12.96% 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.  CBRE Group Class

Hanover Insurance

Risk-Adjusted Performance

Weak

Over the last 90 days The Hanover Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hanover Insurance is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CBRE Group Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CBRE Group Class are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CBRE Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanover Insurance and CBRE Group

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

The idea behind The Hanover Insurance and CBRE Group Class 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.