Correlation Between Malaga Financial and Cintas

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

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

Diversification Opportunities for Malaga Financial and Cintas

-0.45

Correlation Coefficient

Malaga Financial  Cintas

Very good diversification

The 3 months correlation between Malaga and Cintas is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Malaga Financial and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Malaga Financial 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 Malaga Financial 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 Malaga Financial i.e., Malaga Financial and Cintas go up and down completely randomly.

Pair Corralation between Malaga Financial and Cintas

Given the investment horizon of 90 days Malaga Financial is expected to generate 1.18 times more return on investment than Cintas. However, Malaga Financial is 1.18 times more volatile than Cintas. It trades about 0.0 of its potential returns per unit of risk. Cintas is currently generating about -0.03 per unit of risk. If you would invest  2,157  in Malaga Financial on October 26, 2024 and sell it today you would lose (41.00) from holding Malaga Financial or give up 1.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Malaga Financial  vs.  Cintas

Malaga Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Malaga Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Malaga Financial 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 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.

Pair Trading with Malaga Financial and Cintas

The main advantage of trading using opposite Malaga Financial and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malaga Financial 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 Malaga Financial 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.