Correlation Between Cintas and Abercrombie Fitch
Can any of the company-specific risk be diversified away by investing in both Cintas and Abercrombie Fitch 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 Abercrombie Fitch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cintas and Abercrombie Fitch, you can compare the effects of market volatilities on Cintas and Abercrombie Fitch 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 Abercrombie Fitch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and Abercrombie Fitch.
Diversification Opportunities for Cintas and Abercrombie Fitch
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cintas and Abercrombie is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and Abercrombie Fitch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abercrombie Fitch 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 Abercrombie Fitch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abercrombie Fitch has no effect on the direction of Cintas i.e., Cintas and Abercrombie Fitch go up and down completely randomly.
Pair Corralation between Cintas and Abercrombie Fitch
Given the investment horizon of 90 days Cintas is expected to under-perform the Abercrombie Fitch. But the stock apears to be less risky and, when comparing its historical volatility, Cintas is 1.02 times less risky than Abercrombie Fitch. The stock trades about -0.16 of its potential returns per unit of risk. The Abercrombie Fitch is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 13,721 in Abercrombie Fitch on October 12, 2024 and sell it today you would earn a total of 1,441 from holding Abercrombie Fitch or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cintas vs. Abercrombie Fitch
Performance |
| Timeline |
| Cintas |
| Abercrombie Fitch |
Cintas and Abercrombie Fitch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cintas and Abercrombie Fitch
The main advantage of trading using opposite Cintas and Abercrombie Fitch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, Abercrombie Fitch 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 Abercrombie Fitch will offset losses from the drop in Abercrombie Fitch's long position.| Cintas vs. ABM Industries Incorporated | Cintas vs. Copart Inc | Cintas vs. Dolby Laboratories | Cintas vs. Relx PLC ADR |
| Abercrombie Fitch vs. Urban Outfitters | Abercrombie Fitch vs. Foot Locker | Abercrombie Fitch vs. Childrens Place | Abercrombie Fitch vs. American Eagle Outfitters |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| 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 | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |