HANOVER INSURANCE GROUP, INC.

111.37 +0.42 (+0.38%) Buy

Joy for THG investors as it ranks better than it's peers but, has not managed to breakout

13 min read

HANOVER INSURANCE GROUP, INC. showed marginal outperformance today. It increased by +0.38% to close at 111.37. It's recent 5 day performance has been -1.54%, -0.44%, +0.04%, -0.82% and -0.56%.

[Themes containing THG]

THG is currently in a bullish trend. The previous long signal in THG has not been profitable for investors in general. If you are invested in THG at current levels please make sure that your allocation is limited and that your portfolio is well diversified.

Trend

THG has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 16 May, 2017 to 20 Aug, 2018. Over the last 2 years 11 months and 7 days, THG outperformed the SP500 index on 52% days.

During the last three months THG delivered profits on 50% days. However, it still managed to end this period in a loss. It's best return during this period (of +3.0%) was on Thursday, 13 Sep, 2018. While it's worst loss in the same period (of -3.76%) was on Friday, 14 Sep, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 23 Nov, 2018 and went on till 30 Nov, 2018. This bullish trend returned +3.91% to investors.

During the last year THG had 6 profitable months and 6 loss making months. THG returned profits in fewer months than SP500 index. THG significantly outperformed SP500 index in Mar 2018, when it returned +9.25% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. THG had no profitable months, compared to 6 consecutive months of profit by SP500 index during the period Apr 2018 to Sep 2018. It is interesting to note that both THG and SP500 index significantly outperform during months when quarterly/annual results are announced.

I have probably purchased fifty 'hot tips' in my career, maybe even more. When I put them all together, I know I am a net loser.
-- Charles Schwab

THG is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in THG's volatility from 14 Sep, 2018 to 22 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that THG has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

SP500 index has more chance of extreme outcomes than THG. Therefore, SP500 must receive a lower allocation than THG in your portfolio. SP500 index usually has shorter drawdown period than THG.

On a general note (since you are interested in THG), three small cap instruments that deserve special mention are EHC, BURL and AAXN. They have all outperformed the market and must be closely watched for investment opportunities.

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