# 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 decreasing.
- The decline rate of the primary trend is 4.63% per annum.
- THG price at the close of July 19, 2024 was $134.45 and was higher than the top border of the primary price channel by $3.76 (2.88%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 30.01% per annum.
- THG price at the close of July 19, 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:

Y_{i} = α + β × X_{i} + ε_{i}

Top border of price channel:

Exp(Y_{i}) = Exp(a + b × X_{i} + 2 × s)

Bottom border of price channel:

Exp(Y_{i}) = Exp(a + b × X_{i} – 2 × s)

where:

i - observation number

Y_{i} - natural logarithm of THG price

X_{i} - time index, 1 day interval

σ - standard deviation of ε_{i}

a - estimator of α

b - estimator of β

s - estimator of σ

Exp() - calculates the exponent of e

### Primary Trend

Start date: April 6, 2021

End date: January 18, 2024

a = 4.9709

b = -0.0001

s = 0.0693

Annual growth rate:

Exp(365 × b) – 1

= Exp(365 × -0.0001) – 1

= -4.63%

Price channel spread:

Exp(4 × s) – 1

= Exp(4 × 0.0693) – 1

= 31.94%

#### April 6, 2021 calculations

Top border of price channel:

Exp(Y_{430})

= Exp(a + b × X_{430} + 2 × s)

= Exp(a + b × 624 + 2 × s)

= Exp(4.9709 + -0.0001 × 624 + 2 × 0.0693)

= Exp(5.0285)

= $152.71

Bottom border of price channel:

Exp(Y_{430})

= Exp(a + b × X_{430} – 2 × s)

= Exp(a + b × 624 – 2 × s)

= Exp(4.9709 + -0.0001 × 624 – 2 × 0.0693)

= Exp(4.7514)

= $115.74

#### January 18, 2024 calculations

Top border of price channel:

Exp(Y_{1,131})

= Exp(a + b × X_{1,131} + 2 × s)

= Exp(a + b × 1,641 + 2 × s)

= Exp(4.9709 + -0.0001 × 1,641 + 2 × 0.0693)

= Exp(4.8966)

= $133.83

Bottom border of price channel:

Exp(Y_{1,131})

= Exp(a + b × X_{1,131} – 2 × s)

= Exp(a + b × 1,641 – 2 × s)

= Exp(4.9709 + -0.0001 × 1,641 – 2 × 0.0693)

= Exp(4.6194)

= $101.43

#### Description

- The primary trend is decreasing.
- The decline rate of the primary trend is 4.63% per annum.
- THG price at the close of July 19, 2024 was $134.45 and was higher than the top border of the primary price channel by $3.76 (2.88%). This indicates a possible reversal in the primary trend direction.

### Secondary Trend

Start date: May 24, 2023

End date: May 31, 2024

a = 3.6317

b = 0.0007

s = 0.0362

Annual growth rate:

Exp(365 × b) – 1

= Exp(365 × 0.0007) – 1

= 30.01%

Price channel spread:

Exp(4 × s) – 1

= Exp(4 × 0.0362) – 1

= 15.59%

#### May 24, 2023 calculations

Top border of price channel:

Exp(Y_{968})

= Exp(a + b × X_{968} + 2 × s)

= Exp(a + b × 1,402 + 2 × s)

= Exp(3.6317 + 0.0007 × 1,402 + 2 × 0.0362)

= Exp(4.7123)

= $111.31

Bottom border of price channel:

Exp(Y_{968})

= Exp(a + b × X_{968} – 2 × s)

= Exp(a + b × 1,402 – 2 × s)

= Exp(3.6317 + 0.0007 × 1,402 – 2 × 0.0362)

= Exp(4.5675)

= $96.30

#### May 31, 2024 calculations

Top border of price channel:

Exp(Y_{1,224})

= Exp(a + b × X_{1,224} + 2 × s)

= Exp(a + b × 1,775 + 2 × s)

= Exp(3.6317 + 0.0007 × 1,775 + 2 × 0.0362)

= Exp(4.9806)

= $145.56

Bottom border of price channel:

Exp(Y_{1,224})

= Exp(a + b × X_{1,224} – 2 × s)

= Exp(a + b × 1,775 – 2 × s)

= Exp(3.6317 + 0.0007 × 1,775 – 2 × 0.0362)

= Exp(4.8357)

= $125.93

#### Description

- The secondary trend is increasing.
- The growth rate of the secondary trend is 30.01% per annum.
- THG price at the close of July 19, 2024 was inside the secondary price channel.