Correlation Between Cincinnati Financial and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and NioCorp Developments 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 NioCorp Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cincinnati Financial and NioCorp Developments Ltd, you can compare the effects of market volatilities on Cincinnati Financial and NioCorp Developments 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 NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and NioCorp Developments.
Diversification Opportunities for Cincinnati Financial and NioCorp Developments
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cincinnati and NioCorp is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and NioCorp Developments go up and down completely randomly.
Pair Corralation between Cincinnati Financial and NioCorp Developments
Given the investment horizon of 90 days Cincinnati Financial is expected to generate 0.46 times more return on investment than NioCorp Developments. However, Cincinnati Financial is 2.19 times less risky than NioCorp Developments. It trades about 0.35 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about -0.37 per unit of risk. If you would invest 14,083 in Cincinnati Financial on September 1, 2024 and sell it today you would earn a total of 1,900 from holding Cincinnati Financial or generate 13.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cincinnati Financial vs. NioCorp Developments Ltd
Performance |
| Timeline |
| Cincinnati Financial |
| NioCorp Developments |
Cincinnati Financial and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and NioCorp Developments
The main advantage of trading using opposite Cincinnati Financial and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' long position.| Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. The Travelers Companies | Cincinnati Financial vs. W R Berkley | Cincinnati Financial vs. Selective Insurance Group |
| NioCorp Developments vs. Paiute Oil Mining | NioCorp Developments vs. Marfrig Global Foods | NioCorp Developments vs. Emerson Radio | NioCorp Developments vs. Reservoir Media |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |