Correlation Between Hanison Construction and Cincinnati Financial
Can any of the company-specific risk be diversified away by investing in both Hanison Construction 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 Hanison Construction and Cincinnati Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanison Construction Holdings and Cincinnati Financial Corp, you can compare the effects of market volatilities on Hanison Construction 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 Hanison Construction with a short position of Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanison Construction and Cincinnati Financial.
Diversification Opportunities for Hanison Construction and Cincinnati Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanison and Cincinnati is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hanison Construction Holdings 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 Hanison Construction 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 Hanison Construction Holdings 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 Hanison Construction i.e., Hanison Construction and Cincinnati Financial go up and down completely randomly.
Pair Corralation between Hanison Construction and Cincinnati Financial
If you would invest 13,849 in Cincinnati Financial Corp on October 19, 2024 and sell it today you would earn a total of 26.00 from holding Cincinnati Financial Corp or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanison Construction Holdings vs. Cincinnati Financial Corp
Performance |
| Timeline |
| Hanison Construction |
| Cincinnati Financial Corp |
Hanison Construction and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanison Construction and Cincinnati Financial
The main advantage of trading using opposite Hanison Construction and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanison Construction 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.| Hanison Construction vs. INTER CARS SA | Hanison Construction vs. CarsalesCom | Hanison Construction vs. VIVA WINE GROUP | Hanison Construction vs. ARDAGH METAL PACDL 0001 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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