Correlation Between Kontoor Brands and Cintas
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands 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 Kontoor Brands and Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Cintas, you can compare the effects of market volatilities on Kontoor Brands 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 Kontoor Brands with a short position of Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Cintas.
Diversification Opportunities for Kontoor Brands and Cintas
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kontoor and Cintas is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands i.e., Kontoor Brands and Cintas go up and down completely randomly.
Pair Corralation between Kontoor Brands and Cintas
Considering the 90-day investment horizon Kontoor Brands is expected to generate 5.84 times less return on investment than Cintas. In addition to that, Kontoor Brands is 1.89 times more volatile than Cintas. It trades about 0.03 of its total potential returns per unit of risk. Cintas is currently generating about 0.31 per unit of volatility. If you would invest 18,872 in Cintas on November 8, 2024 and sell it today you would earn a total of 1,557 from holding Cintas or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontoor Brands vs. Cintas
Performance |
| Timeline |
| Kontoor Brands |
| Cintas |
Kontoor Brands and Cintas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Cintas
The main advantage of trading using opposite Kontoor Brands and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands 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.| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stocks Directory Find actively traded stocks across global markets |