Correlation Between Curtiss Wright and Cintas
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Cintas 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 Curtiss Wright and Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Cintas, you can compare the effects of market volatilities on Curtiss Wright and Cintas 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 Curtiss Wright with a short position of Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Cintas.
Diversification Opportunities for Curtiss Wright and Cintas
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Curtiss and Cintas is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Curtiss Wright 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 Curtiss Wright are associated (or correlated) with Cintas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cintas has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Cintas go up and down completely randomly.
Pair Corralation between Curtiss Wright and Cintas
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 1.01 times less return on investment than Cintas. In addition to that, Curtiss Wright is 1.62 times more volatile than Cintas. It trades about 0.14 of its total potential returns per unit of risk. Cintas is currently generating about 0.23 per unit of volatility. If you would invest 20,822 in Cintas on August 27, 2024 and sell it today you would earn a total of 1,354 from holding Cintas or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Wright vs. Cintas
Performance |
| Timeline |
| Curtiss Wright |
| Cintas |
Curtiss Wright and Cintas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and Cintas
The main advantage of trading using opposite Curtiss Wright and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Cintas 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 Cintas will offset losses from the drop in Cintas' long position.| Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. AAR Corp | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Moog Inc |
| Cintas vs. ABM Industries Incorporated | Cintas vs. Copart Inc | Cintas vs. Dolby Laboratories | Cintas vs. Relx PLC ADR |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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