Correlation Between Integral and Cintas
Can any of the company-specific risk be diversified away by investing in both Integral 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 Integral and Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integral Ad Science and Cintas, you can compare the effects of market volatilities on Integral 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 Integral with a short position of Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Cintas.
Diversification Opportunities for Integral and Cintas
Poor diversification
The 3 months correlation between Integral and Cintas is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Integral 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 Integral Ad Science 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 Integral i.e., Integral and Cintas go up and down completely randomly.
Pair Corralation between Integral and Cintas
Considering the 90-day investment horizon Integral is expected to generate 8.42 times less return on investment than Cintas. In addition to that, Integral is 1.84 times more volatile than Cintas. It trades about 0.03 of its total potential returns per unit of risk. Cintas is currently generating about 0.4 per unit of volatility. If you would invest 18,270 in Cintas on November 1, 2024 and sell it today you would earn a total of 1,948 from holding Cintas or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integral Ad Science vs. Cintas
Performance |
| Timeline |
| Integral Ad Science |
| Cintas |
Integral and Cintas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integral and Cintas
The main advantage of trading using opposite Integral and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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.The idea behind Integral Ad Science and Cintas 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.| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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