Correlation Between DAX Index and Cincinnati Financial
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By analyzing existing cross correlation between DAX Index and Cincinnati Financial, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Cincinnati Financial.
Diversification Opportunities for DAX Index and Cincinnati Financial
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Cincinnati is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Cincinnati Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial and DAX Index 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 DAX Index 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 has no effect on the direction of DAX Index i.e., DAX Index and Cincinnati Financial go up and down completely randomly.
Pair Corralation between DAX Index and Cincinnati Financial
Assuming the 90 days trading horizon DAX Index is expected to generate 1.25 times less return on investment than Cincinnati Financial. But when comparing it to its historical volatility, DAX Index is 1.85 times less risky than Cincinnati Financial. It trades about 0.1 of its potential returns per unit of risk. Cincinnati Financial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,312 in Cincinnati Financial on September 12, 2024 and sell it today you would earn a total of 5,178 from holding Cincinnati Financial or generate 55.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Cincinnati Financial
Performance |
| Timeline |
DAX Index and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Cincinnati Financial
Pair trading matchups for Cincinnati Financial
Pair Trading with DAX Index and Cincinnati Financial
The main advantage of trading using opposite DAX Index and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. Arrow Electronics | DAX Index vs. CANON MARKETING JP | DAX Index vs. The Trade Desk | DAX Index vs. METHODE ELECTRONICS |
| Cincinnati Financial vs. QBE Insurance Group | Cincinnati Financial vs. Insurance Australia Group | Cincinnati Financial vs. Superior Plus Corp | Cincinnati Financial vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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