Correlation Between Cincinnati Financial and CaixaBank
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and CaixaBank 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 CaixaBank 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 CaixaBank SA, you can compare the effects of market volatilities on Cincinnati Financial and CaixaBank 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 CaixaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and CaixaBank.
Diversification Opportunities for Cincinnati Financial and CaixaBank
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cincinnati and CaixaBank is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and CaixaBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaixaBank SA 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 CaixaBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaixaBank SA has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and CaixaBank go up and down completely randomly.
Pair Corralation between Cincinnati Financial and CaixaBank
Assuming the 90 days trading horizon Cincinnati Financial is expected to generate 1.44 times less return on investment than CaixaBank. But when comparing it to its historical volatility, Cincinnati Financial Corp is 1.33 times less risky than CaixaBank. It trades about 0.06 of its potential returns per unit of risk. CaixaBank SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 333.00 in CaixaBank SA on October 16, 2024 and sell it today you would earn a total of 232.00 from holding CaixaBank SA or generate 69.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cincinnati Financial Corp vs. CaixaBank SA
Performance |
| Timeline |
| Cincinnati Financial Corp |
| CaixaBank SA |
Cincinnati Financial and CaixaBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and CaixaBank
The main advantage of trading using opposite Cincinnati Financial and CaixaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, CaixaBank 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 CaixaBank will offset losses from the drop in CaixaBank's long position.| Cincinnati Financial vs. Cal Maine Foods | Cincinnati Financial vs. ScanSource | Cincinnati Financial vs. LIFEWAY FOODS | Cincinnati Financial vs. VIRGIN WINES UK |
| CaixaBank vs. BNP Paribas SA | CaixaBank vs. BNP PARIBAS ADR | CaixaBank vs. Intesa Sanpaolo SpA | CaixaBank vs. Lloyds Banking Group |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |