Correlation Between Cincinnati Financial and BATSLN
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By analyzing existing cross correlation between Cincinnati Financial and BATSLN 475 01 NOV 42, you can compare the effects of market volatilities on Cincinnati Financial and BATSLN 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 BATSLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and BATSLN.
Diversification Opportunities for Cincinnati Financial and BATSLN
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cincinnati and BATSLN is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial and BATSLN 475 01 NOV 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BATSLN 475 01 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 BATSLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BATSLN 475 01 has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and BATSLN go up and down completely randomly.
Pair Corralation between Cincinnati Financial and BATSLN
Given the investment horizon of 90 days Cincinnati Financial is expected to generate 0.44 times more return on investment than BATSLN. However, Cincinnati Financial is 2.29 times less risky than BATSLN. It trades about 0.06 of its potential returns per unit of risk. BATSLN 475 01 NOV 42 is currently generating about 0.02 per unit of risk. If you would invest 9,948 in Cincinnati Financial on September 14, 2024 and sell it today you would earn a total of 5,268 from holding Cincinnati Financial or generate 52.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.87% |
| Values | Daily Returns |
Cincinnati Financial vs. BATSLN 475 01 NOV 42
Performance |
| Timeline |
| Cincinnati Financial |
| BATSLN 475 01 |
Cincinnati Financial and BATSLN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cincinnati Financial and BATSLN
The main advantage of trading using opposite Cincinnati Financial and BATSLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, BATSLN 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 BATSLN will offset losses from the drop in BATSLN's long position.| Cincinnati Financial vs. W R Berkley | Cincinnati Financial vs. Markel | Cincinnati Financial vs. RLI Corp | Cincinnati Financial vs. CNA Financial |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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