Correlation Between Cboe UK and Cincinnati Financial
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By analyzing existing cross correlation between Cboe UK Consumer and Cincinnati Financial Corp, you can compare the effects of market volatilities on Cboe UK 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 Cboe UK with a short position of Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and Cincinnati Financial.
Diversification Opportunities for Cboe UK and Cincinnati Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cboe and Cincinnati is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer 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 Cboe UK 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 Cboe UK Consumer 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 Cboe UK i.e., Cboe UK and Cincinnati Financial go up and down completely randomly.
Pair Corralation between Cboe UK and Cincinnati Financial
Assuming the 90 days trading horizon Cboe UK is expected to generate 1.25 times less return on investment than Cincinnati Financial. But when comparing it to its historical volatility, Cboe UK Consumer is 2.07 times less risky than Cincinnati Financial. It trades about 0.48 of its potential returns per unit of risk. Cincinnati Financial Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 14,169 in Cincinnati Financial Corp on August 30, 2024 and sell it today you would earn a total of 1,914 from holding Cincinnati Financial Corp or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cboe UK Consumer vs. Cincinnati Financial Corp
Performance |
| Timeline |
Cboe UK and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
Cincinnati Financial Corp
Pair trading matchups for Cincinnati Financial
Pair Trading with Cboe UK and Cincinnati Financial
The main advantage of trading using opposite Cboe UK and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK 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.| Cboe UK vs. Southern Copper Corp | Cboe UK vs. Made Tech Group | Cboe UK vs. Wheaton Precious Metals | Cboe UK vs. TechnipFMC PLC |
| Cincinnati Financial vs. Tungsten West PLC | Cincinnati Financial vs. Argo Group Limited | Cincinnati Financial vs. Hardide PLC | Cincinnati Financial vs. Versarien PLC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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