Correlation Between Cincinnati Financial and Moonpig Group

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and Moonpig Group 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 Cincinnati Financial and Moonpig Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cincinnati Financial Corp and Moonpig Group PLC, you can compare the effects of market volatilities on Cincinnati Financial and Moonpig Group 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 Cincinnati Financial with a short position of Moonpig Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and Moonpig Group.

Diversification Opportunities for Cincinnati Financial and Moonpig Group

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Cincinnati and Moonpig is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial Corp and Moonpig Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonpig Group PLC and Cincinnati Financial 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 Cincinnati Financial Corp are associated (or correlated) with Moonpig Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonpig Group PLC has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and Moonpig Group go up and down completely randomly.

Pair Corralation between Cincinnati Financial and Moonpig Group

Assuming the 90 days trading horizon Cincinnati Financial Corp is expected to generate 0.55 times more return on investment than Moonpig Group. However, Cincinnati Financial Corp is 1.81 times less risky than Moonpig Group. It trades about 0.12 of its potential returns per unit of risk. Moonpig Group PLC is currently generating about 0.06 per unit of risk. If you would invest  13,628  in Cincinnati Financial Corp on September 14, 2024 and sell it today you would earn a total of  1,584  from holding Cincinnati Financial Corp or generate 11.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Cincinnati Financial Corp  vs.  Moonpig Group PLC

 Performance 
       Timeline  
Cincinnati Financial Corp 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Cincinnati Financial Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cincinnati Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Moonpig Group PLC 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Moonpig Group PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Moonpig Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Cincinnati Financial and Moonpig Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cincinnati Financial and Moonpig Group

The main advantage of trading using opposite Cincinnati Financial and Moonpig Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, Moonpig Group 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 Moonpig Group will offset losses from the drop in Moonpig Group's long position.
The idea behind Cincinnati Financial Corp and Moonpig Group PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

Other Complementary Tools

Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.