Correlation Between 21036PBL1 and Cincinnati Financial
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By analyzing existing cross correlation between STZ 475 09 MAY 32 and Cincinnati Financial, you can compare the effects of market volatilities on 21036PBL1 and Cincinnati Financial 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 21036PBL1 with a short position of Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21036PBL1 and Cincinnati Financial.
Diversification Opportunities for 21036PBL1 and Cincinnati Financial
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 21036PBL1 and Cincinnati is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding STZ 475 09 MAY 32 and Cincinnati Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial and 21036PBL1 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 STZ 475 09 MAY 32 are associated (or correlated) with Cincinnati Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cincinnati Financial has no effect on the direction of 21036PBL1 i.e., 21036PBL1 and Cincinnati Financial go up and down completely randomly.
Pair Corralation between 21036PBL1 and Cincinnati Financial
Assuming the 90 days trading horizon STZ 475 09 MAY 32 is expected to generate 0.54 times more return on investment than Cincinnati Financial. However, STZ 475 09 MAY 32 is 1.86 times less risky than Cincinnati Financial. It trades about 0.09 of its potential returns per unit of risk. Cincinnati Financial is currently generating about -0.19 per unit of risk. If you would invest 9,666 in STZ 475 09 MAY 32 on October 25, 2024 and sell it today you would earn a total of 120.00 from holding STZ 475 09 MAY 32 or generate 1.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 94.74% |
Values | Daily Returns |
STZ 475 09 MAY 32 vs. Cincinnati Financial
Performance |
Timeline |
STZ 475 09 |
Cincinnati Financial |
21036PBL1 and Cincinnati Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 21036PBL1 and Cincinnati Financial
The main advantage of trading using opposite 21036PBL1 and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21036PBL1 position performs unexpectedly, Cincinnati Financial 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 Cincinnati Financial will offset losses from the drop in Cincinnati Financial's long position.21036PBL1 vs. Neogen | 21036PBL1 vs. Goosehead Insurance | 21036PBL1 vs. AG Mortgage Investment | 21036PBL1 vs. Apartment Investment and |
Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. The Travelers Companies | Cincinnati Financial vs. Chubb | Cincinnati Financial vs. W R Berkley |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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