Correlation Between Cincinnati Financial and Jupiter Fund
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and Jupiter Fund 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 Jupiter Fund 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 Jupiter Fund Management, you can compare the effects of market volatilities on Cincinnati Financial and Jupiter Fund 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 Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and Jupiter Fund.
Diversification Opportunities for Cincinnati Financial and Jupiter Fund
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cincinnati and Jupiter is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and Jupiter Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Fund Management 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 Jupiter Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Fund Management has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and Jupiter Fund go up and down completely randomly.
Pair Corralation between Cincinnati Financial and Jupiter Fund
Assuming the 90 days trading horizon Cincinnati Financial Corp is expected to generate 1.82 times more return on investment than Jupiter Fund. However, Cincinnati Financial is 1.82 times more volatile than Jupiter Fund Management. It trades about 0.28 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about 0.17 per unit of risk. If you would invest 14,144 in Cincinnati Financial Corp on September 2, 2024 and sell it today you would earn a total of 1,788 from holding Cincinnati Financial Corp or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cincinnati Financial Corp vs. Jupiter Fund Management
Performance |
| Timeline |
| Cincinnati Financial Corp |
| Jupiter Fund Management |
Cincinnati Financial and Jupiter Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and Jupiter Fund
The main advantage of trading using opposite Cincinnati Financial and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, Jupiter Fund 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 Jupiter Fund will offset losses from the drop in Jupiter Fund's long position.| Cincinnati Financial vs. Uniper SE | Cincinnati Financial vs. Mulberry Group PLC | Cincinnati Financial vs. London Security Plc | Cincinnati Financial vs. Triad Group PLC |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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