Correlation Between Cincinnati Financial and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and PPHE Hotel 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 PPHE Hotel 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 PPHE Hotel Group, you can compare the effects of market volatilities on Cincinnati Financial and PPHE Hotel 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 PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and PPHE Hotel.
Diversification Opportunities for Cincinnati Financial and PPHE Hotel
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cincinnati and PPHE is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel 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 PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and PPHE Hotel go up and down completely randomly.
Pair Corralation between Cincinnati Financial and PPHE Hotel
Assuming the 90 days trading horizon Cincinnati Financial Corp is expected to generate 1.4 times more return on investment than PPHE Hotel. However, Cincinnati Financial is 1.4 times more volatile than PPHE Hotel Group. It trades about 0.22 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about -0.03 per unit of risk. If you would invest 13,555 in Cincinnati Financial Corp on September 3, 2024 and sell it today you would earn a total of 2,377 from holding Cincinnati Financial Corp or generate 17.54% 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. PPHE Hotel Group
Performance |
| Timeline |
| Cincinnati Financial Corp |
| PPHE Hotel Group |
Cincinnati Financial and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and PPHE Hotel
The main advantage of trading using opposite Cincinnati Financial and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel'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 |
| PPHE Hotel vs. Sovereign Metals | PPHE Hotel vs. bet at home AG | PPHE Hotel vs. Gaztransport et Technigaz | PPHE Hotel vs. American Homes 4 |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |