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 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:
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: 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(Y430)
= Exp(a + b × X430 + 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(Y430)
= Exp(a + b × X430 – 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(Y1,131)
= Exp(a + b × X1,131 + 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(Y1,131)
= Exp(a + b × X1,131 – 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(Y968)
= Exp(a + b × X968 + 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(Y968)
= Exp(a + b × X968 – 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(Y1,224)
= Exp(a + b × X1,224 + 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(Y1,224)
= Exp(a + b × X1,224 – 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.