Correlation Between Cincinnati Financial and WE Source

Can any of the company-specific risk be diversified away by investing in both Cincinnati Financial and WE Source 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 WE Source into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cincinnati Financial and WE Source Corp, you can compare the effects of market volatilities on Cincinnati Financial and WE Source 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 WE Source. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cincinnati Financial and WE Source.

Diversification Opportunities for Cincinnati Financial and WE Source

0.0

Correlation Coefficient

Cincinnati Financial  WE Source

Pay attention - limited upside

The 3 months correlation between Cincinnati and WESC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Financial and WE Source Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WE Source Corp 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 are associated (or correlated) with WE Source. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WE Source Corp has no effect on the direction of Cincinnati Financial i.e., Cincinnati Financial and WE Source go up and down completely randomly.

Pair Corralation between Cincinnati Financial and WE Source

If you would invest  15,260  in Cincinnati Financial on September 6, 2025 and sell it today you would earn a total of  1,041  from holding Cincinnati Financial or generate 6.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Cincinnati Financial  vs.  WE Source Corp

Cincinnati Financial

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cincinnati Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cincinnati Financial may actually be approaching a critical reversion point that can send shares even higher in January 2026.

WE Source Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days WE Source Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, WE Source is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cincinnati Financial and WE Source

The main advantage of trading using opposite Cincinnati Financial and WE Source positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Financial position performs unexpectedly, WE Source 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 WE Source will offset losses from the drop in WE Source's long position.

The idea behind Cincinnati Financial and WE Source Corp 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.

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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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.