Correlation Between Elis SA and Cintas
Can any of the company-specific risk be diversified away by investing in both Elis SA and Cintas 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 Elis SA and Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elis SA and Cintas, you can compare the effects of market volatilities on Elis SA and Cintas 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 Elis SA with a short position of Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elis SA and Cintas.
Diversification Opportunities for Elis SA and Cintas
Average diversification
The 3 months correlation between Elis and Cintas is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Elis SA and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Elis SA 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 Elis SA are associated (or correlated) with Cintas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cintas has no effect on the direction of Elis SA i.e., Elis SA and Cintas go up and down completely randomly.
Pair Corralation between Elis SA and Cintas
Assuming the 90 days horizon Elis SA is expected to under-perform the Cintas. In addition to that, Elis SA is 1.76 times more volatile than Cintas. It trades about -0.06 of its total potential returns per unit of risk. Cintas is currently generating about 0.22 per unit of volatility. If you would invest 15,247 in Cintas on September 1, 2024 and sell it today you would earn a total of 6,283 from holding Cintas or generate 41.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Elis SA vs. Cintas
Performance |
| Timeline |
| Elis SA |
| Cintas |
Elis SA and Cintas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elis SA and Cintas
The main advantage of trading using opposite Elis SA and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elis SA position performs unexpectedly, Cintas 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 Cintas will offset losses from the drop in Cintas' long position.| Elis SA vs. INTERSHOP Communications Aktiengesellschaft | Elis SA vs. MI Homes | Elis SA vs. INVITATION HOMES DL | Elis SA vs. LGI Homes |
| Cintas vs. Autohome ADR | Cintas vs. Haverty Furniture Companies | Cintas vs. Taylor Morrison Home | Cintas vs. TITAN MACHINERY |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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