Correlation Between Cintas and Conwest Assoc
Can any of the company-specific risk be diversified away by investing in both Cintas and Conwest Assoc 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 Conwest Assoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cintas and Conwest Assoc Part, you can compare the effects of market volatilities on Cintas and Conwest Assoc 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 Conwest Assoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and Conwest Assoc.
Diversification Opportunities for Cintas and Conwest Assoc
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cintas and Conwest is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and Conwest Assoc Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conwest Assoc Part 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 Conwest Assoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conwest Assoc Part has no effect on the direction of Cintas i.e., Cintas and Conwest Assoc go up and down completely randomly.
Pair Corralation between Cintas and Conwest Assoc
Given the investment horizon of 90 days Cintas is expected to generate 0.99 times more return on investment than Conwest Assoc. However, Cintas is 1.01 times less risky than Conwest Assoc. It trades about 0.16 of its potential returns per unit of risk. Conwest Assoc Part is currently generating about -0.03 per unit of risk. If you would invest 20,448 in Cintas on August 25, 2024 and sell it today you would earn a total of 1,728 from holding Cintas or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.56% |
| Values | Daily Returns |
Cintas vs. Conwest Assoc Part
Performance |
| Timeline |
| Cintas |
| Conwest Assoc Part |
Cintas and Conwest Assoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cintas and Conwest Assoc
The main advantage of trading using opposite Cintas and Conwest Assoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, Conwest Assoc 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 Conwest Assoc will offset losses from the drop in Conwest Assoc's long position.| Cintas vs. ABM Industries Incorporated | Cintas vs. Copart Inc | Cintas vs. Dolby Laboratories | Cintas vs. Relx PLC ADR |
| Conwest Assoc vs. Cintas | Conwest Assoc vs. Thomson Reuters Corp | Conwest Assoc vs. Global Payments | Conwest Assoc vs. RB Global |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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