Correlation Between Cincinnati Financial and JSC Halyk

Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and JSC Halyk 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 JSC Halyk 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 JSC Halyk bank, you can compare the effects of market volatilities on Cincinnati Financial and JSC Halyk 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 JSC Halyk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and JSC Halyk.

Diversification Opportunities for Cincinnati Financial and JSC Halyk

0.42

Correlation Coefficient

Cincinnati Financial  JSC Halyk

Very weak diversification

The 3 months correlation between Cincinnati and JSC is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and JSC Halyk bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSC Halyk bank 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 JSC Halyk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSC Halyk bank has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and JSC Halyk go up and down completely randomly.

Pair Corralation between Cincinnati Financial and JSC Halyk

Assuming the 90 days trading horizon Cincinnati Financial is expected to generate 72.69 times less return on investment than JSC Halyk. But when comparing it to its historical volatility, Cincinnati Financial Corp is 2.77 times less risky than JSC Halyk. It trades about 0.01 of its potential returns per unit of risk. JSC Halyk bank is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,750  in JSC Halyk bank on October 22, 2024 and sell it today you would earn a total of  140.00  from holding JSC Halyk bank or generate 8.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cincinnati Financial Corp  vs.  JSC Halyk bank

Cincinnati Financial Corp

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cincinnati Financial Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Cincinnati Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

JSC Halyk bank

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JSC Halyk bank are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, JSC Halyk reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cincinnati Financial and JSC Halyk

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

The idea behind Cincinnati Financial Corp and JSC Halyk bank 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..