Correlation Between Cincinnati Financial and ICC Holdings
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and ICC Holdings 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 ICC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cincinnati Financial and ICC Holdings, you can compare the effects of market volatilities on Cincinnati Financial and ICC Holdings 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 ICC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and ICC Holdings.
Diversification Opportunities for Cincinnati Financial and ICC Holdings
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cincinnati and ICC is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings 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 are associated (or correlated) with ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and ICC Holdings go up and down completely randomly.
Pair Corralation between Cincinnati Financial and ICC Holdings
Given the investment horizon of 90 days Cincinnati Financial is expected to generate 2.21 times more return on investment than ICC Holdings. However, Cincinnati Financial is 2.21 times more volatile than ICC Holdings. It trades about 0.05 of its potential returns per unit of risk. ICC Holdings is currently generating about 0.03 per unit of risk. If you would invest 14,228 in Cincinnati Financial on December 28, 2024 and sell it today you would earn a total of 526.00 from holding Cincinnati Financial or generate 3.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 83.33% |
Values | Daily Returns |
Cincinnati Financial vs. ICC Holdings
Performance |
Timeline |
Cincinnati Financial |
ICC Holdings |
Risk-Adjusted Performance
Weak
Weak | Strong |
Cincinnati Financial and ICC Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cincinnati Financial and ICC Holdings
The main advantage of trading using opposite Cincinnati Financial and ICC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, ICC Holdings 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 ICC Holdings will offset losses from the drop in ICC Holdings' long position.Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. The Travelers Companies | Cincinnati Financial vs. Chubb | Cincinnati Financial vs. W R Berkley |
ICC Holdings vs. Employers Holdings | ICC Holdings vs. AMERISAFE | ICC Holdings vs. NMI Holdings | ICC Holdings vs. Investors Title |
Check out your portfolio center.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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |