Correlation Between Cincinnati Financial and Nokia

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

By analyzing existing cross correlation between Cincinnati Financial and Nokia 6625 percent, you can compare the effects of market volatilities on Cincinnati Financial and Nokia 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 Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and Nokia.

Diversification Opportunities for Cincinnati Financial and Nokia

-0.78

Correlation Coefficient

Cincinnati Financial  Nokia

Pay attention - limited upside

The 3 months correlation between Cincinnati and Nokia is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial and Nokia 6625 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia 6625 percent 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 Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia 6625 percent has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and Nokia go up and down completely randomly.

Pair Corralation between Cincinnati Financial and Nokia

Given the investment horizon of 90 days Cincinnati Financial is expected to generate 1.42 times more return on investment than Nokia. However, Cincinnati Financial is 1.42 times more volatile than Nokia 6625 percent. It trades about 0.16 of its potential returns per unit of risk. Nokia 6625 percent is currently generating about -0.16 per unit of risk. If you would invest  13,554  in Cincinnati Financial on September 5, 2024 and sell it today you would earn a total of  2,076  from holding Cincinnati Financial or generate 15.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

Cincinnati Financial  vs.  Nokia 6625 percent

Cincinnati Financial

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cincinnati Financial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Cincinnati Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Nokia 6625 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nokia 6625 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Nokia 6625 percent investors.

Pair Trading with Cincinnati Financial and Nokia

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

The idea behind Cincinnati Financial and Nokia 6625 percent 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.