Correlation Between Cintas and Heineken
Can any of the company-specific risk be diversified away by investing in both Cintas and Heineken 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 Heineken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cintas and Heineken NV, you can compare the effects of market volatilities on Cintas and Heineken 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 Heineken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and Heineken.
Diversification Opportunities for Cintas and Heineken
Pay attention - limited upside
The 3 months correlation between Cintas and Heineken is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and Heineken NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken NV 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 Heineken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken NV has no effect on the direction of Cintas i.e., Cintas and Heineken go up and down completely randomly.
Pair Corralation between Cintas and Heineken
Given the investment horizon of 90 days Cintas is expected to generate 0.77 times more return on investment than Heineken. However, Cintas is 1.29 times less risky than Heineken. It trades about 0.19 of its potential returns per unit of risk. Heineken NV is currently generating about -0.41 per unit of risk. If you would invest 20,933 in Cintas on August 24, 2024 and sell it today you would earn a total of 1,216 from holding Cintas or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cintas vs. Heineken NV
Performance |
| Timeline |
| Cintas |
| Heineken NV |
Cintas and Heineken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cintas and Heineken
The main advantage of trading using opposite Cintas and Heineken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, Heineken 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 Heineken will offset losses from the drop in Heineken's long position.| Cintas vs. ABM Industries Incorporated | Cintas vs. Copart Inc | Cintas vs. Dolby Laboratories | Cintas vs. Relx PLC ADR |
| Heineken vs. Barfresh Food Group | Heineken vs. Fbec Worldwide | Heineken vs. Flow Beverage Corp | Heineken vs. Eq Energy Drink |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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