Correlation Between Univest Pennsylvania and Cincinnati Financial
Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania 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 Univest Pennsylvania and Cincinnati Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univest Pennsylvania and Cincinnati Financial, you can compare the effects of market volatilities on Univest Pennsylvania 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 Univest Pennsylvania with a short position of Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and Cincinnati Financial.
Diversification Opportunities for Univest Pennsylvania and Cincinnati Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Univest and Cincinnati is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and Cincinnati Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial and Univest Pennsylvania 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 Univest Pennsylvania 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 Univest Pennsylvania i.e., Univest Pennsylvania and Cincinnati Financial go up and down completely randomly.
Pair Corralation between Univest Pennsylvania and Cincinnati Financial
Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 1.6 times more return on investment than Cincinnati Financial. However, Univest Pennsylvania is 1.6 times more volatile than Cincinnati Financial. It trades about 0.09 of its potential returns per unit of risk. Cincinnati Financial is currently generating about 0.09 per unit of risk. If you would invest 1,583 in Univest Pennsylvania on August 31, 2024 and sell it today you would earn a total of 1,615 from holding Univest Pennsylvania or generate 102.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Univest Pennsylvania vs. Cincinnati Financial
Performance |
| Timeline |
| Univest Pennsylvania |
| Cincinnati Financial |
Univest Pennsylvania and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Univest Pennsylvania and Cincinnati Financial
The main advantage of trading using opposite Univest Pennsylvania and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania 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.| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic Bancorp |
| Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. Chubb | Cincinnati Financial vs. The Allstate | Cincinnati Financial vs. Selective Insurance Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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