Correlation Between Cintas and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both Cintas and Geratherm Medical 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 Cintas and Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cintas and Geratherm Medical AG, you can compare the effects of market volatilities on Cintas and Geratherm Medical 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 Cintas with a short position of Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and Geratherm Medical.
Diversification Opportunities for Cintas and Geratherm Medical
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cintas and Geratherm is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical and Cintas 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 Cintas are associated (or correlated) with Geratherm Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geratherm Medical has no effect on the direction of Cintas i.e., Cintas and Geratherm Medical go up and down completely randomly.
Pair Corralation between Cintas and Geratherm Medical
Assuming the 90 days horizon Cintas is expected to generate 0.65 times more return on investment than Geratherm Medical. However, Cintas is 1.54 times less risky than Geratherm Medical. It trades about -0.05 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about -0.15 per unit of risk. If you would invest 19,194 in Cintas on January 22, 2025 and sell it today you would lose (1,094) from holding Cintas or give up 5.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cintas vs. Geratherm Medical AG
Performance |
| Timeline |
| Cintas |
| Geratherm Medical |
Cintas and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cintas and Geratherm Medical
The main advantage of trading using opposite Cintas and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, Geratherm Medical 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 Geratherm Medical will offset losses from the drop in Geratherm Medical's long position.| Cintas vs. Hisense Home Appliances | Cintas vs. bet at home AG | Cintas vs. Neinor Homes SA | Cintas vs. Sligro Food Group |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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