Correlation Between Cintas and WALMART

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Can any of the company-specific risk be diversified away by investing in both Cintas and WALMART 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 WALMART into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cintas and WALMART INC 3625, you can compare the effects of market volatilities on Cintas and WALMART 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 WALMART. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and WALMART.

Diversification Opportunities for Cintas and WALMART

CintasWALMARTDiversified AwayCintasWALMARTDiversified Away100%
0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Cintas and WALMART is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and WALMART INC 3625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WALMART INC 3625 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 WALMART. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WALMART INC 3625 has no effect on the direction of Cintas i.e., Cintas and WALMART go up and down completely randomly.

Pair Corralation between Cintas and WALMART

Given the investment horizon of 90 days Cintas is expected to generate 0.76 times more return on investment than WALMART. However, Cintas is 1.32 times less risky than WALMART. It trades about 0.2 of its potential returns per unit of risk. WALMART INC 3625 is currently generating about 0.14 per unit of risk. If you would invest  18,677  in Cintas on November 23, 2024 and sell it today you would earn a total of  1,766  from holding Cintas or generate 9.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy85.0%
ValuesDaily Returns

Cintas  vs.  WALMART INC 3625

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15CTAS 931142DW0
       Timeline  
Cintas 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Cintas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb180190200210220
WALMART INC 3625 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in WALMART INC 3625 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, WALMART is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.157576777879808182

Cintas and WALMART Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.1-2.32-1.54-0.76-0.01250.711.462.212.963.71 0.050.100.150.20
JavaScript chart by amCharts 3.21.15CTAS 931142DW0
       Returns  

Pair Trading with Cintas and WALMART

The main advantage of trading using opposite Cintas and WALMART positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, WALMART 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 WALMART will offset losses from the drop in WALMART's long position.
The idea behind Cintas and WALMART INC 3625 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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