Correlation Between Cincinnati Financial and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and GreenX Metals 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 GreenX Metals 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 GreenX Metals, you can compare the effects of market volatilities on Cincinnati Financial and GreenX Metals 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and GreenX Metals.
Diversification Opportunities for Cincinnati Financial and GreenX Metals
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cincinnati and GreenX is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and GreenX Metals go up and down completely randomly.
Pair Corralation between Cincinnati Financial and GreenX Metals
Assuming the 90 days trading horizon Cincinnati Financial Corp is expected to generate 0.57 times more return on investment than GreenX Metals. However, Cincinnati Financial Corp is 1.75 times less risky than GreenX Metals. It trades about -0.03 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.08 per unit of risk. If you would invest 15,144 in Cincinnati Financial Corp on September 12, 2024 and sell it today you would lose (120.00) from holding Cincinnati Financial Corp or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cincinnati Financial Corp vs. GreenX Metals
Performance |
| Timeline |
| Cincinnati Financial Corp |
| GreenX Metals |
Cincinnati Financial and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and GreenX Metals
The main advantage of trading using opposite Cincinnati Financial and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| Cincinnati Financial vs. Hong Kong Land | Cincinnati Financial vs. Neometals | Cincinnati Financial vs. Coor Service Management | Cincinnati Financial vs. Fidelity Sustainable USD |
| GreenX Metals vs. GoldMining | GreenX Metals vs. Liontrust Asset Management | GreenX Metals vs. Jacquet Metal Service | GreenX Metals vs. Southwest Airlines Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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