Correlation Between Western Metals and Cincinnati Financial
Can any of the company-specific risk be diversified away by investing in both Western Metals 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 Western Metals and Cincinnati Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Metals and Cincinnati Financial, you can compare the effects of market volatilities on Western Metals 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 Western Metals with a short position of Cincinnati Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metals and Cincinnati Financial.
Diversification Opportunities for Western Metals and Cincinnati Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Cincinnati is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Metals and Cincinnati Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Financial and Western Metals 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 Western Metals 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 Western Metals i.e., Western Metals and Cincinnati Financial go up and down completely randomly.
Pair Corralation between Western Metals and Cincinnati Financial
If you would invest 13,819 in Cincinnati Financial on September 4, 2024 and sell it today you would earn a total of 1,939 from holding Cincinnati Financial or generate 14.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Western Metals vs. Cincinnati Financial
Performance |
| Timeline |
| Western Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cincinnati Financial |
Western Metals and Cincinnati Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metals and Cincinnati Financial
The main advantage of trading using opposite Western Metals and Cincinnati Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metals 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.| Western Metals vs. Cincinnati Financial | Western Metals vs. Noble plc | Western Metals vs. SunOpta | Western Metals vs. Pekin Life Insurance |
| Cincinnati Financial vs. Progressive Corp | Cincinnati Financial vs. The Travelers Companies | Cincinnati Financial vs. Chubb | Cincinnati Financial vs. W R Berkley |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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