Correlation Between Cincinnati Financial and Physiomics Plc
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and Physiomics Plc 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 Physiomics Plc 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 Physiomics Plc, you can compare the effects of market volatilities on Cincinnati Financial and Physiomics Plc 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 Physiomics Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and Physiomics Plc.
Diversification Opportunities for Cincinnati Financial and Physiomics Plc
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cincinnati and Physiomics is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and Physiomics Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Physiomics 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 Physiomics Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Physiomics Plc has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and Physiomics Plc go up and down completely randomly.
Pair Corralation between Cincinnati Financial and Physiomics Plc
Assuming the 90 days trading horizon Cincinnati Financial Corp is expected to under-perform the Physiomics Plc. But the stock apears to be less risky and, when comparing its historical volatility, Cincinnati Financial Corp is 3.81 times less risky than Physiomics Plc. The stock trades about -0.27 of its potential returns per unit of risk. The Physiomics Plc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Physiomics Plc on September 22, 2024 and sell it today you would earn a total of 7.00 from holding Physiomics Plc or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cincinnati Financial Corp vs. Physiomics Plc
Performance |
| Timeline |
| Cincinnati Financial Corp |
| Physiomics Plc |
Cincinnati Financial and Physiomics Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and Physiomics Plc
The main advantage of trading using opposite Cincinnati Financial and Physiomics Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, Physiomics Plc 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 Physiomics Plc will offset losses from the drop in Physiomics Plc's long position.| Cincinnati Financial vs. Samsung Electronics Co | Cincinnati Financial vs. Samsung Electronics Co | Cincinnati Financial vs. Hyundai Motor | Cincinnati Financial vs. Reliance Industries Ltd |
| Physiomics Plc vs. Ameriprise Financial | Physiomics Plc vs. Cincinnati Financial Corp | Physiomics Plc vs. Metals Exploration Plc | Physiomics Plc vs. GreenX Metals |
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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