Correlation Between Canna Consumer and Cintas

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

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

Diversification Opportunities for Canna Consumer and Cintas

0.1

Correlation Coefficient

Canna Consumer  Cintas

Average diversification

The 3 months correlation between Canna and Cintas is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Canna Consumer Goods and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Canna Consumer 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 Canna Consumer Goods 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 Canna Consumer i.e., Canna Consumer and Cintas go up and down completely randomly.

Pair Corralation between Canna Consumer and Cintas

Given the investment horizon of 90 days Canna Consumer Goods is expected to generate 7.23 times more return on investment than Cintas. However, Canna Consumer is 7.23 times more volatile than Cintas. It trades about 0.16 of its potential returns per unit of risk. Cintas is currently generating about -0.06 per unit of risk. If you would invest  10.00  in Canna Consumer Goods on September 17, 2024 and sell it today you would earn a total of  3.00  from holding Canna Consumer Goods or generate 30.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Canna Consumer Goods  vs.  Cintas

Canna Consumer Goods

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canna Consumer Goods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Canna Consumer revealed solid returns over the last few months and may actually be approaching a breakup point.

Cintas

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cintas are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cintas is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Canna Consumer and Cintas

The main advantage of trading using opposite Canna Consumer and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canna Consumer 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 Canna Consumer Goods 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..