Correlation Between Pinnacle Sherman and Cintas

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

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

Diversification Opportunities for Pinnacle Sherman and Cintas

0.28

Correlation Coefficient

Pinnacle Sherman  Cintas

Modest diversification

The 3 months correlation between Pinnacle and Cintas is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Sherman Multi Strateg and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Pinnacle Sherman 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 Pinnacle Sherman Multi Strategy 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 Pinnacle Sherman i.e., Pinnacle Sherman and Cintas go up and down completely randomly.

Pair Corralation between Pinnacle Sherman and Cintas

Assuming the 90 days horizon Pinnacle Sherman Multi Strategy is expected to under-perform the Cintas. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pinnacle Sherman Multi Strategy is 1.0 times less risky than Cintas. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Cintas is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  18,333  in Cintas on December 30, 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pinnacle Sherman Multi Strateg  vs.  Cintas

Pinnacle Sherman Multi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pinnacle Sherman Multi Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Pinnacle Sherman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Pinnacle Sherman and Cintas

The main advantage of trading using opposite Pinnacle Sherman and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Sherman 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 Pinnacle Sherman Multi Strategy 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..