Correlation Between VCI Global and Cintas

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

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

Diversification Opportunities for VCI Global and Cintas

-0.64

Correlation Coefficient

VCI Global  Cintas

Excellent diversification

The 3 months correlation between VCI and Cintas is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and VCI Global 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 VCI Global Limited 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 VCI Global i.e., VCI Global and Cintas go up and down completely randomly.

Pair Corralation between VCI Global and Cintas

Given the investment horizon of 90 days VCI Global Limited is expected to under-perform the Cintas. In addition to that, VCI Global is 6.06 times more volatile than Cintas. It trades about -0.16 of its total potential returns per unit of risk. Cintas is currently generating about 0.14 per unit of volatility. If you would invest  18,302  in Cintas on December 27, 2024 and sell it today you would earn a total of  2,169  from holding Cintas or generate 11.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

VCI Global Limited  vs.  Cintas

VCI Global Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days VCI Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Cintas

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cintas are ranked lower than 10 (%) 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 VCI Global and Cintas

The main advantage of trading using opposite VCI Global and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VCI Global 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 VCI Global Limited 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.