Correlation Between Cincinnati Financial and RCS MediaGroup
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and RCS MediaGroup 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 RCS MediaGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cincinnati Financial and RCS MediaGroup SpA, you can compare the effects of market volatilities on Cincinnati Financial and RCS MediaGroup 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 RCS MediaGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and RCS MediaGroup.
Diversification Opportunities for Cincinnati Financial and RCS MediaGroup
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cincinnati and RCS is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial and RCS MediaGroup SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCS MediaGroup SpA 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 RCS MediaGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCS MediaGroup SpA has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and RCS MediaGroup go up and down completely randomly.
Pair Corralation between Cincinnati Financial and RCS MediaGroup
Given the investment horizon of 90 days Cincinnati Financial is expected to generate 0.67 times more return on investment than RCS MediaGroup. However, Cincinnati Financial is 1.48 times less risky than RCS MediaGroup. It trades about 0.15 of its potential returns per unit of risk. RCS MediaGroup SpA is currently generating about 0.07 per unit of risk. If you would invest 9,986 in Cincinnati Financial on September 2, 2024 and sell it today you would earn a total of 5,997 from holding Cincinnati Financial or generate 60.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 66.13% |
| Values | Daily Returns |
Cincinnati Financial vs. RCS MediaGroup SpA
Performance |
| Timeline |
| Cincinnati Financial |
| RCS MediaGroup SpA |
Cincinnati Financial and RCS MediaGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and RCS MediaGroup
The main advantage of trading using opposite Cincinnati Financial and RCS MediaGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, RCS MediaGroup 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 RCS MediaGroup will offset losses from the drop in RCS MediaGroup's long position.| Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. The Travelers Companies | Cincinnati Financial vs. Chubb | Cincinnati Financial vs. W R Berkley |
| RCS MediaGroup vs. Slate Office REIT | RCS MediaGroup vs. HUMANA INC | RCS MediaGroup vs. Aquagold International | RCS MediaGroup vs. Barloworld Ltd ADR |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |