Correlation Between CENTURIA OFFICE and Cincinnati Financial
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Cincinnati Financial 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 CENTURIA OFFICE and Cincinnati Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CENTURIA OFFICE REIT and Cincinnati Financial Corp, you can compare the effects of market volatilities on CENTURIA OFFICE and Cincinnati Financial 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 CENTURIA OFFICE with a short position of Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Cincinnati Financial.
Diversification Opportunities for CENTURIA OFFICE and Cincinnati Financial
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between CENTURIA and Cincinnati is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Cincinnati Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial Corp and CENTURIA OFFICE 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 CENTURIA OFFICE REIT are associated (or correlated) with Cincinnati Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cincinnati Financial Corp has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Cincinnati Financial go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Cincinnati Financial
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to generate 2.06 times more return on investment than Cincinnati Financial. However, CENTURIA OFFICE is 2.06 times more volatile than Cincinnati Financial Corp. It trades about 0.28 of its potential returns per unit of risk. Cincinnati Financial Corp is currently generating about -0.25 per unit of risk. If you would invest 58.00 in CENTURIA OFFICE REIT on October 27, 2024 and sell it today you would earn a total of 9.00 from holding CENTURIA OFFICE REIT or generate 15.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. Cincinnati Financial Corp
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Cincinnati Financial Corp |
CENTURIA OFFICE and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Cincinnati Financial
The main advantage of trading using opposite CENTURIA OFFICE and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Cincinnati Financial 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 Cincinnati Financial will offset losses from the drop in Cincinnati Financial's long position.| CENTURIA OFFICE vs. Coeur Mining | CENTURIA OFFICE vs. Firan Technology Group | CENTURIA OFFICE vs. IMPERIAL TOBACCO | CENTURIA OFFICE vs. VELA TECHNOLPLC LS 0001 |
| Cincinnati Financial vs. NTT DATA | Cincinnati Financial vs. Datadog | Cincinnati Financial vs. Keck Seng Investments | Cincinnati Financial vs. DATATEC LTD 2 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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