Correlation Between Cincinnati Financial and Insig Ai
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and Insig Ai 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 Insig Ai 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 Insig Ai PLC, you can compare the effects of market volatilities on Cincinnati Financial and Insig Ai 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 Insig Ai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and Insig Ai.
Diversification Opportunities for Cincinnati Financial and Insig Ai
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cincinnati and Insig is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and Insig Ai PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insig Ai PLC 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 Insig Ai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insig Ai PLC has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and Insig Ai go up and down completely randomly.
Pair Corralation between Cincinnati Financial and Insig Ai
Assuming the 90 days trading horizon Cincinnati Financial Corp is expected to generate 0.46 times more return on investment than Insig Ai. However, Cincinnati Financial Corp is 2.18 times less risky than Insig Ai. It trades about 0.05 of its potential returns per unit of risk. Insig Ai PLC is currently generating about 0.01 per unit of risk. If you would invest 10,186 in Cincinnati Financial Corp on August 27, 2024 and sell it today you would earn a total of 5,348 from holding Cincinnati Financial Corp or generate 52.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.57% |
| Values | Daily Returns |
Cincinnati Financial Corp vs. Insig Ai PLC
Performance |
| Timeline |
| Cincinnati Financial Corp |
| Insig Ai PLC |
Cincinnati Financial and Insig Ai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and Insig Ai
The main advantage of trading using opposite Cincinnati Financial and Insig Ai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, Insig Ai 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 Insig Ai will offset losses from the drop in Insig Ai's long position.| Cincinnati Financial vs. Samsung Electronics Co | Cincinnati Financial vs. Samsung Electronics Co | Cincinnati Financial vs. Hyundai Motor | Cincinnati Financial vs. Toyota Motor Corp |
| Insig Ai vs. Bellevue Healthcare Trust | Insig Ai vs. LBG Media PLC | Insig Ai vs. Eco Animal Health | Insig Ai vs. HCA Healthcare |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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