Correlation Between Cincinnati Financial and Hyundai
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and Hyundai 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 Hyundai 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 Hyundai Motor, you can compare the effects of market volatilities on Cincinnati Financial and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and Hyundai.
Diversification Opportunities for Cincinnati Financial and Hyundai
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cincinnati and Hyundai is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and Hyundai go up and down completely randomly.
Pair Corralation between Cincinnati Financial and Hyundai
Assuming the 90 days trading horizon Cincinnati Financial is expected to generate 1.0 times less return on investment than Hyundai. But when comparing it to its historical volatility, Cincinnati Financial Corp is 1.72 times less risky than Hyundai. It trades about 0.14 of its potential returns per unit of risk. Hyundai Motor is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,684 in Hyundai Motor on September 3, 2024 and sell it today you would earn a total of 1,936 from holding Hyundai Motor or generate 52.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Cincinnati Financial Corp vs. Hyundai Motor
Performance |
| Timeline |
| Cincinnati Financial Corp |
| Hyundai Motor |
Cincinnati Financial and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and Hyundai
The main advantage of trading using opposite Cincinnati Financial and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| Cincinnati Financial vs. Catalyst Media Group | Cincinnati Financial vs. CATLIN GROUP | Cincinnati Financial vs. Magnora ASA | Cincinnati Financial vs. RTW Venture Fund |
| Hyundai vs. Bank of Ireland | Hyundai vs. Sparebank 1 SR | Hyundai vs. Elmos Semiconductor SE | Hyundai vs. Cincinnati Financial Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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