Correlation Between Cincinnati Bancorp and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Cincinnati Bancorp and Dow Jones 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 Bancorp and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cincinnati Bancorp and Dow Jones Industrial, you can compare the effects of market volatilities on Cincinnati Bancorp and Dow Jones 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 Bancorp with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Bancorp and Dow Jones.
Diversification Opportunities for Cincinnati Bancorp and Dow Jones
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cincinnati and Dow is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Bancorp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Cincinnati Bancorp 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 Bancorp are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Cincinnati Bancorp i.e., Cincinnati Bancorp and Dow Jones go up and down completely randomly.
Pair Corralation between Cincinnati Bancorp and Dow Jones
If you would invest 3,885,286 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 544,365 from holding Dow Jones Industrial or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Cincinnati Bancorp vs. Dow Jones Industrial
Performance |
| Timeline |
Cincinnati Bancorp and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Cincinnati Bancorp
Pair trading matchups for Cincinnati Bancorp
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Cincinnati Bancorp and Dow Jones
The main advantage of trading using opposite Cincinnati Bancorp and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Bancorp position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Cincinnati Bancorp vs. Middlefield Banc | Cincinnati Bancorp vs. CB Financial Services | Cincinnati Bancorp vs. Orange County Bancorp | Cincinnati Bancorp vs. Ames National |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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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