Correlation Between Cincinnati Financial and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cincinnati Financial and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on Cincinnati Financial and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and ELMOS SEMICONDUCTOR.
Diversification Opportunities for Cincinnati Financial and ELMOS SEMICONDUCTOR
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cincinnati and ELMOS is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR 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 are associated (or correlated) with ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Cincinnati Financial and ELMOS SEMICONDUCTOR
Assuming the 90 days horizon Cincinnati Financial is expected to generate 0.52 times more return on investment than ELMOS SEMICONDUCTOR. However, Cincinnati Financial is 1.93 times less risky than ELMOS SEMICONDUCTOR. It trades about 0.07 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about 0.02 per unit of risk. If you would invest 9,312 in Cincinnati Financial on September 12, 2024 and sell it today you would earn a total of 5,178 from holding Cincinnati Financial or generate 55.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cincinnati Financial vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| Cincinnati Financial |
| ELMOS SEMICONDUCTOR |
Cincinnati Financial and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite Cincinnati Financial and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.| Cincinnati Financial vs. QBE Insurance Group | Cincinnati Financial vs. Insurance Australia Group | Cincinnati Financial vs. Superior Plus Corp | Cincinnati Financial vs. SIVERS SEMICONDUCTORS AB |
| ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc | ELMOS SEMICONDUCTOR vs. Apple Inc |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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