Correlation Between Cincinnati Financial and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and Catalyst Media 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 Catalyst Media 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 Catalyst Media Group, you can compare the effects of market volatilities on Cincinnati Financial and Catalyst Media 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 Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and Catalyst Media.
Diversification Opportunities for Cincinnati Financial and Catalyst Media
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cincinnati and Catalyst is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and Catalyst Media go up and down completely randomly.
Pair Corralation between Cincinnati Financial and Catalyst Media
Assuming the 90 days trading horizon Cincinnati Financial Corp is expected to generate 0.87 times more return on investment than Catalyst Media. However, Cincinnati Financial Corp is 1.15 times less risky than Catalyst Media. It trades about 0.09 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.03 per unit of risk. If you would invest 9,644 in Cincinnati Financial Corp on September 12, 2024 and sell it today you would earn a total of 5,380 from holding Cincinnati Financial Corp or generate 55.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.43% |
| Values | Daily Returns |
Cincinnati Financial Corp vs. Catalyst Media Group
Performance |
| Timeline |
| Cincinnati Financial Corp |
| Catalyst Media Group |
Cincinnati Financial and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and Catalyst Media
The main advantage of trading using opposite Cincinnati Financial and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| Cincinnati Financial vs. Hong Kong Land | Cincinnati Financial vs. Neometals | Cincinnati Financial vs. Coor Service Management | Cincinnati Financial vs. Fidelity Sustainable USD |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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