Stock Price Trends

The Hanover Insurance Group Inc (THG)

Hanover Insurance Group, Inc. offers a variety of property and casualty insurance products and services in the United States. The company is headquartered in Worcester, Massachusetts.

Stock Price Trends

Stock price trends estimated using linear regression.

Key facts

  • The primary trend is increasing.
  • The growth rate of the primary trend is 59.74% per annum.
  • THG price at the close of April 16, 2024 was $129.11 and was lower than the bottom border of the primary price channel by $6.88 (5.06%). This indicates a possible reversal in the primary trend direction.
  • The secondary trend is decreasing.
  • The decline rate of the secondary trend is 3.41% per annum.
  • THG price at the close of April 16, 2024 was inside the secondary price channel.
  • The direction of the secondary trend is opposite to the direction of the primary trend. This indicates a possible reversal in the direction of the primary trend.

Linear Regression Model

Model equation:
Yi = α + β × Xi + εi

Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)

Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)

where:

i - observation number
Yi - natural logarithm of THG price
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e


Primary Trend

Start date: August 9, 2023
End date: February 29, 2024

a = 2.6163

b = 0.0013

s = 0.0235

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × 0.0013) – 1
= 59.74%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0235) – 1
= 9.84%

August 9, 2023 calculations

Top border of price channel:

Exp(Y1,085)
= Exp(a + b × X1,085 + 2 × s)
= Exp(a + b × 1,575 + 2 × s)
= Exp(2.6163 + 0.0013 × 1,575 + 2 × 0.0235)
= Exp(4.6844)
= $108.24

Bottom border of price channel:

Exp(Y1,085)
= Exp(a + b × X1,085 – 2 × s)
= Exp(a + b × 1,575 – 2 × s)
= Exp(2.6163 + 0.0013 × 1,575 – 2 × 0.0235)
= Exp(4.5905)
= $98.54

February 29, 2024 calculations

Top border of price channel:

Exp(Y1,225)
= Exp(a + b × X1,225 + 2 × s)
= Exp(a + b × 1,779 + 2 × s)
= Exp(2.6163 + 0.0013 × 1,779 + 2 × 0.0235)
= Exp(4.9462)
= $140.63

Bottom border of price channel:

Exp(Y1,225)
= Exp(a + b × X1,225 – 2 × s)
= Exp(a + b × 1,779 – 2 × s)
= Exp(2.6163 + 0.0013 × 1,779 – 2 × 0.0235)
= Exp(4.8523)
= $128.03

Description

  • The primary trend is increasing.
  • The growth rate of the primary trend is 59.74% per annum.
  • THG price at the close of April 16, 2024 was $129.11 and was lower than the bottom border of the primary price channel by $6.88 (5.06%). This indicates a possible reversal in the primary trend direction.

Secondary Trend

Start date: January 22, 2024
End date: April 16, 2024

a = 5.0426

b = -0.0001

s = 0.0187

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -3.41%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0187) – 1
= 7.76%

January 22, 2024 calculations

Top border of price channel:

Exp(Y1,198)
= Exp(a + b × X1,198 + 2 × s)
= Exp(a + b × 1,741 + 2 × s)
= Exp(5.0426 + -0.0001 × 1,741 + 2 × 0.0187)
= Exp(4.9147)
= $136.27

Bottom border of price channel:

Exp(Y1,198)
= Exp(a + b × X1,198 – 2 × s)
= Exp(a + b × 1,741 – 2 × s)
= Exp(5.0426 + -0.0001 × 1,741 – 2 × 0.0187)
= Exp(4.8399)
= $126.46

April 16, 2024 calculations

Top border of price channel:

Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(5.0426 + -0.0001 × 1,826 + 2 × 0.0187)
= Exp(4.9066)
= $135.18

Bottom border of price channel:

Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(5.0426 + -0.0001 × 1,826 – 2 × 0.0187)
= Exp(4.8318)
= $125.44

Description

  • The secondary trend is decreasing.
  • The decline rate of the secondary trend is 3.41% per annum.
  • THG price at the close of April 16, 2024 was inside the secondary price channel.