Correlation Between Cincinnati Financial and DNB Asian

Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and DNB Asian 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 Cincinnati Financial and DNB Asian into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cincinnati Financial Corp and DNB Asian Small, you can compare the effects of market volatilities on Cincinnati Financial and DNB Asian 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 Cincinnati Financial with a short position of DNB Asian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and DNB Asian.

Diversification Opportunities for Cincinnati Financial and DNB Asian

0.0

Correlation Coefficient

Cincinnati Financial  DNB Asian

Pay attention - limited upside

The 3 months correlation between Cincinnati and DNB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and DNB Asian Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DNB Asian Small and Cincinnati Financial 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 Cincinnati Financial Corp are associated (or correlated) with DNB Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DNB Asian Small has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and DNB Asian go up and down completely randomly.

Pair Corralation between Cincinnati Financial and DNB Asian

If you would invest (100.00) in DNB Asian Small on December 22, 2024 and sell it today you would earn a total of  100.00  from holding DNB Asian Small or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cincinnati Financial Corp  vs.  DNB Asian Small

Cincinnati Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cincinnati Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cincinnati Financial is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

DNB Asian Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days DNB Asian Small has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, DNB Asian is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cincinnati Financial and DNB Asian

The main advantage of trading using opposite Cincinnati Financial and DNB Asian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, DNB Asian 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 DNB Asian will offset losses from the drop in DNB Asian's long position.

The idea behind Cincinnati Financial Corp and DNB Asian Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.