Correlation Between Cintas and HIMARK

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

By analyzing existing cross correlation between Cintas and HIMARK 145 10 MAY 26, you can compare the effects of market volatilities on Cintas and HIMARK 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 HIMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and HIMARK.

Diversification Opportunities for Cintas and HIMARK

0.18

Correlation Coefficient

Cintas  HIMARK

Average diversification

The 3 months correlation between Cintas and HIMARK is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and HIMARK 145 10 MAY 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIMARK 145 10 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 HIMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIMARK 145 10 has no effect on the direction of Cintas i.e., Cintas and HIMARK go up and down completely randomly.

Pair Corralation between Cintas and HIMARK

Given the investment horizon of 90 days Cintas is expected to generate 4.63 times more return on investment than HIMARK. However, Cintas is 4.63 times more volatile than HIMARK 145 10 MAY 26. It trades about 0.04 of its potential returns per unit of risk. HIMARK 145 10 MAY 26 is currently generating about -0.04 per unit of risk. If you would invest  18,677  in Cintas on December 22, 2024 and sell it today you would earn a total of  440.00  from holding Cintas or generate 2.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	45.0%
Values	Daily Returns

Cintas  vs.  HIMARK 145 10 MAY 26

Cintas

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cintas are ranked lower than 2 (%) 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.

HIMARK 145 10

Risk-Adjusted Performance

Very Weak

Over the last 90 days HIMARK 145 10 MAY 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HIMARK is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cintas and HIMARK

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

The idea behind Cintas and HIMARK 145 10 MAY 26 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.