Correlation Between Foresight Environmental and Cincinnati Financial
Can any of the company-specific risk be diversified away by investing in both Foresight Environmental and Cincinnati Financial 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 Foresight Environmental and Cincinnati Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foresight Environmental Infrastructure and Cincinnati Financial Corp, you can compare the effects of market volatilities on Foresight Environmental and Cincinnati Financial 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 Foresight Environmental with a short position of Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foresight Environmental and Cincinnati Financial.
Diversification Opportunities for Foresight Environmental and Cincinnati Financial
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Foresight and Cincinnati is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Foresight Environmental Infras and Cincinnati Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial Corp and Foresight Environmental 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 Foresight Environmental Infrastructure are associated (or correlated) with Cincinnati Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cincinnati Financial Corp has no effect on the direction of Foresight Environmental i.e., Foresight Environmental and Cincinnati Financial go up and down completely randomly.
Pair Corralation between Foresight Environmental and Cincinnati Financial
Assuming the 90 days trading horizon Foresight Environmental Infrastructure is expected to under-perform the Cincinnati Financial. In addition to that, Foresight Environmental is 1.25 times more volatile than Cincinnati Financial Corp. It trades about -0.22 of its total potential returns per unit of risk. Cincinnati Financial Corp is currently generating about 0.11 per unit of volatility. If you would invest 14,916 in Cincinnati Financial Corp on September 15, 2024 and sell it today you would earn a total of 403.00 from holding Cincinnati Financial Corp or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foresight Environmental Infras vs. Cincinnati Financial Corp
Performance |
| Timeline |
| Foresight Environmental |
| Cincinnati Financial Corp |
Foresight Environmental and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foresight Environmental and Cincinnati Financial
The main advantage of trading using opposite Foresight Environmental and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foresight Environmental position performs unexpectedly, Cincinnati Financial 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 Cincinnati Financial will offset losses from the drop in Cincinnati Financial's long position.| Foresight Environmental vs. CATCo Reinsurance Opportunities | Foresight Environmental vs. BH Macro Limited | Foresight Environmental vs. Legal General Group | Foresight Environmental vs. TMT Investments PLC |
| Cincinnati Financial vs. Samsung Electronics Co | Cincinnati Financial vs. Samsung Electronics Co | Cincinnati Financial vs. Hyundai Motor | Cincinnati Financial vs. Reliance Industries Ltd |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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