Correlation Between Jerash Holdings and Cintas

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

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

Diversification Opportunities for Jerash Holdings and Cintas

-0.25

Correlation Coefficient

Jerash Holdings  Cintas

Very good diversification

The 3 months correlation between Jerash and Cintas is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Jerash Holdings and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Jerash Holdings 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 Jerash Holdings 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 Jerash Holdings i.e., Jerash Holdings and Cintas go up and down completely randomly.

Pair Corralation between Jerash Holdings and Cintas

Given the investment horizon of 90 days Jerash Holdings is expected to under-perform the Cintas. In addition to that, Jerash Holdings is 1.33 times more volatile than Cintas. It trades about 0.0 of its total potential returns per unit of risk. Cintas is currently generating about 0.1 per unit of volatility. If you would invest  10,716  in Cintas on October 11, 2024 and sell it today you would earn a total of  8,549  from holding Cintas or generate 79.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Jerash Holdings  vs.  Cintas

Jerash Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jerash Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Jerash Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 Jerash Holdings and Cintas

The main advantage of trading using opposite Jerash Holdings and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jerash Holdings 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 Jerash Holdings 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..