Correlation Between Cintas and Thomson Reuters
Can any of the company-specific risk be diversified away by investing in both Cintas and Thomson Reuters 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 Thomson Reuters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cintas and Thomson Reuters Corp, you can compare the effects of market volatilities on Cintas and Thomson Reuters 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 Thomson Reuters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and Thomson Reuters.
Diversification Opportunities for Cintas and Thomson Reuters
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cintas and Thomson is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and Thomson Reuters Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thomson Reuters 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 Thomson Reuters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thomson Reuters Corp has no effect on the direction of Cintas i.e., Cintas and Thomson Reuters go up and down completely randomly.
Pair Corralation between Cintas and Thomson Reuters
Given the investment horizon of 90 days Cintas is expected to generate 1.02 times more return on investment than Thomson Reuters. However, Cintas is 1.02 times more volatile than Thomson Reuters Corp. It trades about 0.29 of its potential returns per unit of risk. Thomson Reuters Corp is currently generating about -0.11 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 1,825 from holding Cintas or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cintas vs. Thomson Reuters Corp
Performance |
| Timeline |
| Cintas |
| Thomson Reuters Corp |
Cintas and Thomson Reuters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cintas and Thomson Reuters
The main advantage of trading using opposite Cintas and Thomson Reuters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, Thomson Reuters 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 Thomson Reuters will offset losses from the drop in Thomson Reuters' long position.| Cintas vs. ABM Industries Incorporated | Cintas vs. Copart Inc | Cintas vs. Dolby Laboratories | Cintas vs. Relx PLC ADR |
| Thomson Reuters vs. Franklin Covey | Thomson Reuters vs. TransUnion | Thomson Reuters vs. ICF International | Thomson Reuters vs. Huron Consulting Group |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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