Correlation Between Cincinnati Financial and SunOpta
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and SunOpta 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 SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cincinnati Financial and SunOpta, you can compare the effects of market volatilities on Cincinnati Financial and SunOpta 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 SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and SunOpta.
Diversification Opportunities for Cincinnati Financial and SunOpta
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cincinnati and SunOpta is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and SunOpta go up and down completely randomly.
Pair Corralation between Cincinnati Financial and SunOpta
Given the investment horizon of 90 days Cincinnati Financial is expected to generate 1.2 times less return on investment than SunOpta. But when comparing it to its historical volatility, Cincinnati Financial is 2.37 times less risky than SunOpta. It trades about 0.15 of its potential returns per unit of risk. SunOpta is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 486.00 in SunOpta on September 3, 2024 and sell it today you would earn a total of 289.00 from holding SunOpta or generate 59.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cincinnati Financial vs. SunOpta
Performance |
| Timeline |
| Cincinnati Financial |
| SunOpta |
Cincinnati Financial and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and SunOpta
The main advantage of trading using opposite Cincinnati Financial and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.| Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. The Travelers Companies | Cincinnati Financial vs. Chubb | Cincinnati Financial vs. W R Berkley |
| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |