Correlation Between Frontera and Cintas

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

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

Diversification Opportunities for Frontera and Cintas

0.0

Correlation Coefficient

Frontera  Cintas

Pay attention - limited upside

The 3 months correlation between Frontera and Cintas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Frontera Group and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Frontera 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 Frontera Group 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 Frontera i.e., Frontera and Cintas go up and down completely randomly.

Pair Corralation between Frontera and Cintas

If you would invest  13,723  in Cintas on October 3, 2024 and sell it today you would earn a total of  4,547  from holding Cintas or generate 33.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Frontera Group  vs.  Cintas

Frontera Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frontera Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Frontera is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 latest unfluctuating performance, the Stock's basic 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 Frontera and Cintas

The main advantage of trading using opposite Frontera and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontera 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 Frontera Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.