Correlation Between Cintas and G III

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

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

Diversification Opportunities for Cintas and G III

-0.4

Correlation Coefficient

Cintas  G III

Very good diversification

The 3 months correlation between Cintas and GIII is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Cintas i.e., Cintas and G III go up and down completely randomly.

Pair Corralation between Cintas and G III

Given the investment horizon of 90 days Cintas is expected to under-perform the G III. But the stock apears to be less risky and, when comparing its historical volatility, Cintas is 1.14 times less risky than G III. The stock trades about -0.03 of its potential returns per unit of risk. The G III Apparel Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,130  in G III Apparel Group on October 27, 2024 and sell it today you would earn a total of  16.00  from holding G III Apparel Group or generate 0.51% return on investment over 90 days.

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

Cintas  vs.  G III Apparel Group

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.

G III Apparel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in G III Apparel Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, G III is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cintas and G III

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

The idea behind Cintas and G III Apparel Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.