Correlation Between Cintas and White Fox

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

By analyzing existing cross correlation between Cintas and White Fox Ventures, you can compare the effects of market volatilities on Cintas and White Fox 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 White Fox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and White Fox.

Diversification Opportunities for Cintas and White Fox

0.76

Correlation Coefficient

Cintas  White Fox

Poor diversification

The 3 months correlation between Cintas and White is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and White Fox Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Fox Ventures 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 are associated (or correlated) with White Fox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Fox Ventures has no effect on the direction of Cintas i.e., Cintas and White Fox go up and down completely randomly.

Pair Corralation between Cintas and White Fox

Given the investment horizon of 90 days Cintas is expected to generate 0.16 times more return on investment than White Fox. However, Cintas is 6.19 times less risky than White Fox. It trades about -0.28 of its potential returns per unit of risk. White Fox Ventures is currently generating about -0.37 per unit of risk. If you would invest  21,875  in Cintas on September 21, 2024 and sell it today you would lose (3,280) from holding Cintas or give up 14.99% of portfolio value over 90 days.

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

Cintas  vs.  White Fox Ventures

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. 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.

White Fox Ventures

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in White Fox Ventures are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, White Fox showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cintas and White Fox

The main advantage of trading using opposite Cintas and White Fox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, White Fox 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 White Fox will offset losses from the drop in White Fox's long position.

The idea behind Cintas and White Fox Ventures 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 Stocks Directory module to find actively traded stocks across global markets.