Correlation Between Hanover Insurance and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hanover Insurance and Magnachip Semiconductor 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 Magnachip Semiconductor 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 Magnachip Semiconductor, you can compare the effects of market volatilities on Hanover Insurance and Magnachip Semiconductor 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 Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Insurance and Magnachip Semiconductor.
Diversification Opportunities for Hanover Insurance and Magnachip Semiconductor
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanover and Magnachip is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding The Hanover Insurance and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor 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 Magnachip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnachip Semiconductor has no effect on the direction of Hanover Insurance i.e., Hanover Insurance and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Hanover Insurance and Magnachip Semiconductor
Assuming the 90 days horizon Hanover Insurance is expected to generate 12.14 times less return on investment than Magnachip Semiconductor. But when comparing it to its historical volatility, The Hanover Insurance is 1.73 times less risky than Magnachip Semiconductor. It trades about 0.02 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 282.00 in Magnachip Semiconductor on April 24, 2025 and sell it today you would earn a total of 78.00 from holding Magnachip Semiconductor or generate 27.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Hanover Insurance vs. Magnachip Semiconductor
Performance |
Timeline |
Hanover Insurance |
Magnachip Semiconductor |
Hanover Insurance and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanover Insurance and Magnachip Semiconductor
The main advantage of trading using opposite Hanover Insurance and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanover Insurance position performs unexpectedly, Magnachip Semiconductor 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 Magnachip Semiconductor will offset losses from the drop in Magnachip Semiconductor's long position.Hanover Insurance vs. Coeur Mining | Hanover Insurance vs. GRIFFIN MINING LTD | Hanover Insurance vs. MUTUIONLINE | Hanover Insurance vs. GOLDGROUP MINING INC |
Magnachip Semiconductor vs. Fevertree Drinks PLC | Magnachip Semiconductor vs. High Liner Foods | Magnachip Semiconductor vs. GWILLI FOOD | Magnachip Semiconductor vs. Astral Foods Limited |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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