Correlation Between CINTAS and Cumberland Pharmaceuticals
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By analyzing existing cross correlation between CINTAS P NO and Cumberland Pharmaceuticals, you can compare the effects of market volatilities on CINTAS and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CINTAS and Cumberland Pharmaceuticals.
Diversification Opportunities for CINTAS and Cumberland Pharmaceuticals
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CINTAS and Cumberland is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CINTAS P NO and Cumberland Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumberland Pharmaceuticals 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 P NO are associated (or correlated) with Cumberland Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumberland Pharmaceuticals has no effect on the direction of CINTAS i.e., CINTAS and Cumberland Pharmaceuticals go up and down completely randomly.
Pair Corralation between CINTAS and Cumberland Pharmaceuticals
Assuming the 90 days trading horizon CINTAS P NO is expected to generate 0.08 times more return on investment than Cumberland Pharmaceuticals. However, CINTAS P NO is 12.08 times less risky than Cumberland Pharmaceuticals. It trades about -0.03 of its potential returns per unit of risk. Cumberland Pharmaceuticals is currently generating about -0.34 per unit of risk. If you would invest 9,830 in CINTAS P NO on August 28, 2024 and sell it today you would lose (11.00) from holding CINTAS P NO or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CINTAS P NO vs. Cumberland Pharmaceuticals
Performance |
| Timeline |
| CINTAS P NO |
| Cumberland Pharmaceuticals |
CINTAS and Cumberland Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CINTAS and Cumberland Pharmaceuticals
The main advantage of trading using opposite CINTAS and Cumberland Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CINTAS position performs unexpectedly, Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals will offset losses from the drop in Cumberland Pharmaceuticals' long position.| CINTAS vs. Cumberland Pharmaceuticals | CINTAS vs. Sun Country Airlines | CINTAS vs. Nexstar Broadcasting Group | CINTAS vs. Microbot Medical |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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