Correlation Between Cintas and Maximus

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

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

Diversification Opportunities for Cintas and Maximus

-0.43

Correlation Coefficient

Cintas  Maximus

Very good diversification

The 3 months correlation between Cintas and Maximus is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and Maximus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maximus 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 Maximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maximus has no effect on the direction of Cintas i.e., Cintas and Maximus go up and down completely randomly.

Pair Corralation between Cintas and Maximus

Given the investment horizon of 90 days Cintas is expected to generate 0.79 times more return on investment than Maximus. However, Cintas is 1.27 times less risky than Maximus. It trades about 0.12 of its potential returns per unit of risk. Maximus is currently generating about -0.06 per unit of risk. If you would invest  18,333  in Cintas on December 29, 2024 and sell it today you would earn a total of  1,989  from holding Cintas or generate 10.85% 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.  Maximus

Cintas

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cintas are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cintas may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Maximus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maximus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Cintas and Maximus

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

The idea behind Cintas and Maximus 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.