Correlation Between Cincinnati Financial and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and Hecla Mining 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 Hecla Mining 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 Hecla Mining Co, you can compare the effects of market volatilities on Cincinnati Financial and Hecla Mining 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 Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and Hecla Mining.
Diversification Opportunities for Cincinnati Financial and Hecla Mining
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cincinnati and Hecla is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining 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 Hecla Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hecla Mining has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and Hecla Mining go up and down completely randomly.
Pair Corralation between Cincinnati Financial and Hecla Mining
Assuming the 90 days trading horizon Cincinnati Financial Corp is expected to generate 0.39 times more return on investment than Hecla Mining. However, Cincinnati Financial Corp is 2.57 times less risky than Hecla Mining. It trades about 0.06 of its potential returns per unit of risk. Hecla Mining Co is currently generating about 0.02 per unit of risk. If you would invest 10,035 in Cincinnati Financial Corp on December 4, 2024 and sell it today you would earn a total of 4,521 from holding Cincinnati Financial Corp or generate 45.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.43% |
| Values | Daily Returns |
Cincinnati Financial Corp vs. Hecla Mining Co
Performance |
| Timeline |
| Cincinnati Financial Corp |
| Hecla Mining |
Cincinnati Financial and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and Hecla Mining
The main advantage of trading using opposite Cincinnati Financial and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, Hecla Mining 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 Hecla Mining will offset losses from the drop in Hecla Mining's long position.| Cincinnati Financial vs. Tyson Foods Cl | Cincinnati Financial vs. Solstad Offshore ASA | Cincinnati Financial vs. Premier Foods PLC | Cincinnati Financial vs. BW Offshore |
| Hecla Mining vs. Fevertree Drinks Plc | Hecla Mining vs. Empire Metals Limited | Hecla Mining vs. Critical Metals Plc | Hecla Mining vs. Eastinco Mining Exploration |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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