Correlation Between Cintas and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Cintas and SalMar ASA 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 SalMar ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cintas and SalMar ASA, you can compare the effects of market volatilities on Cintas and SalMar ASA 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 SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and SalMar ASA.
Diversification Opportunities for Cintas and SalMar ASA
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cintas and SalMar is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA 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 SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Cintas i.e., Cintas and SalMar ASA go up and down completely randomly.
Pair Corralation between Cintas and SalMar ASA
Given the investment horizon of 90 days Cintas is expected to generate 0.4 times more return on investment than SalMar ASA. However, Cintas is 2.52 times less risky than SalMar ASA. It trades about 0.25 of its potential returns per unit of risk. SalMar ASA is currently generating about -0.02 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cintas vs. SalMar ASA
Performance |
| Timeline |
| Cintas |
| SalMar ASA |
Cintas and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cintas and SalMar ASA
The main advantage of trading using opposite Cintas and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, SalMar ASA 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 SalMar ASA will offset losses from the drop in SalMar ASA's long position.| Cintas vs. ABM Industries Incorporated | Cintas vs. Copart Inc | Cintas vs. Dolby Laboratories | Cintas vs. Relx PLC ADR |
| SalMar ASA vs. SLC Agricola SA | SalMar ASA vs. Cal Maine Foods | SalMar ASA vs. Bunge Limited | SalMar ASA vs. Austevoll Seafood ASA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |