Correlation Between Grounded People and Cintas
Can any of the company-specific risk be diversified away by investing in both Grounded People 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 Grounded People and Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grounded People Apparel and Cintas, you can compare the effects of market volatilities on Grounded People 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 Grounded People with a short position of Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grounded People and Cintas.
Diversification Opportunities for Grounded People and Cintas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grounded and Cintas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grounded People Apparel and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Grounded People 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 Grounded People Apparel 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 Grounded People i.e., Grounded People and Cintas go up and down completely randomly.
Pair Corralation between Grounded People and Cintas
Assuming the 90 days horizon Grounded People Apparel is expected to generate 4.21 times more return on investment than Cintas. However, Grounded People is 4.21 times more volatile than Cintas. It trades about 0.03 of its potential returns per unit of risk. Cintas is currently generating about 0.1 per unit of risk. If you would invest 101.00 in Grounded People Apparel on October 27, 2024 and sell it today you would earn a total of 2.00 from holding Grounded People Apparel or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grounded People Apparel vs. Cintas
Performance |
| Timeline |
| Grounded People Apparel |
| Cintas |
Grounded People and Cintas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grounded People and Cintas
The main advantage of trading using opposite Grounded People and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grounded People 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.| Grounded People vs. Verra Mobility Corp | Grounded People vs. Deluxe | Grounded People vs. Saia Inc | Grounded People vs. Lindblad Expeditions Holdings |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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