Correlation Between Cintas and Civeo Corp
Can any of the company-specific risk be diversified away by investing in both Cintas and Civeo Corp 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 Civeo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cintas and Civeo Corp, you can compare the effects of market volatilities on Cintas and Civeo Corp 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 Civeo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and Civeo Corp.
Diversification Opportunities for Cintas and Civeo Corp
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cintas and Civeo is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and Civeo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civeo Corp 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 Civeo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civeo Corp has no effect on the direction of Cintas i.e., Cintas and Civeo Corp go up and down completely randomly.
Pair Corralation between Cintas and Civeo Corp
Given the investment horizon of 90 days Cintas is expected to generate 0.56 times more return on investment than Civeo Corp. However, Cintas is 1.77 times less risky than Civeo Corp. It trades about 0.26 of its potential returns per unit of risk. Civeo Corp is currently generating about -0.25 per unit of risk. If you would invest 20,822 in Cintas on August 28, 2024 and sell it today you would earn a total of 1,568 from holding Cintas or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cintas vs. Civeo Corp
Performance |
| Timeline |
| Cintas |
| Civeo Corp |
Cintas and Civeo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cintas and Civeo Corp
The main advantage of trading using opposite Cintas and Civeo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, Civeo Corp 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 Civeo Corp will offset losses from the drop in Civeo Corp's long position.| Cintas vs. ABM Industries Incorporated | Cintas vs. Copart Inc | Cintas vs. Dolby Laboratories | Cintas vs. Relx PLC ADR |
| Civeo Corp vs. Network 1 Technologies | Civeo Corp vs. BrightView Holdings | Civeo Corp vs. Maximus | Civeo Corp vs. CBIZ Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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