Correlation Between ITALIAN WINE and Cintas
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE 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 ITALIAN WINE and Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and Cintas, you can compare the effects of market volatilities on ITALIAN WINE 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 ITALIAN WINE with a short position of Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Cintas.
Diversification Opportunities for ITALIAN WINE and Cintas
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITALIAN and Cintas is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and ITALIAN WINE 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 ITALIAN WINE BRANDS 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 ITALIAN WINE i.e., ITALIAN WINE and Cintas go up and down completely randomly.
Pair Corralation between ITALIAN WINE and Cintas
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the Cintas. But the stock apears to be less risky and, when comparing its historical volatility, ITALIAN WINE BRANDS is 1.01 times less risky than Cintas. The stock trades about -0.04 of its potential returns per unit of risk. The Cintas is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 19,403 in Cintas on October 23, 2024 and sell it today you would earn a total of 102.00 from holding Cintas or generate 0.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
ITALIAN WINE BRANDS vs. Cintas
Performance |
Timeline |
ITALIAN WINE BRANDS |
Cintas |
ITALIAN WINE and Cintas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ITALIAN WINE and Cintas
The main advantage of trading using opposite ITALIAN WINE and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE 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.ITALIAN WINE vs. Clean Energy Fuels | ITALIAN WINE vs. Highlight Communications AG | ITALIAN WINE vs. ULTRA CLEAN HLDGS | ITALIAN WINE vs. Beazer Homes USA |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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