Correlation Between LABOCANNA and Cintas

Can any of the company-specific risk be diversified away by investing in both LABOCANNA 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 LABOCANNA and Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LABOCANNA SA ZY 10 and Cintas, you can compare the effects of market volatilities on LABOCANNA 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 LABOCANNA with a short position of Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of LABOCANNA and Cintas.

Diversification Opportunities for LABOCANNA and Cintas

0.31

Correlation Coefficient

LABOCANNA  Cintas

Weak diversification

The 3 months correlation between LABOCANNA and Cintas is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding LABOCANNA SA ZY 10 and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and LABOCANNA 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 LABOCANNA SA ZY 10 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 LABOCANNA i.e., LABOCANNA and Cintas go up and down completely randomly.

Pair Corralation between LABOCANNA and Cintas

Assuming the 90 days horizon LABOCANNA SA ZY 10 is expected to generate 2.96 times more return on investment than Cintas. However, LABOCANNA is 2.96 times more volatile than Cintas. It trades about 0.24 of its potential returns per unit of risk. Cintas is currently generating about 0.46 per unit of risk. If you would invest  5.46  in LABOCANNA SA ZY 10 on October 25, 2024 and sell it today you would earn a total of  0.80  from holding LABOCANNA SA ZY 10 or generate 14.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

LABOCANNA SA ZY 10  vs.  Cintas

LABOCANNA SA ZY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LABOCANNA SA ZY 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, LABOCANNA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Cintas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cintas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cintas is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with LABOCANNA and Cintas

The main advantage of trading using opposite LABOCANNA and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LABOCANNA 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 LABOCANNA SA ZY 10 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..