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
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VCI and Cintas is 0.35. 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 4.12 times more volatile than Cintas. It trades about -0.27 of its total potential returns per unit of risk. Cintas is currently generating about -0.05 per unit of volatility. If you would invest 22,222 in Cintas on December 1, 2024 and sell it today you would lose (1,472) from holding Cintas or give up 6.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
VCI Global Limited vs. Cintas
Performance |
Timeline |
VCI Global Limited |
Cintas |
VCI Global and Cintas Volatility Contrast
Predicted Return Density |
Returns |
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.VCI Global vs. CRA International | VCI Global vs. ICF International | VCI Global vs. Forrester Research | VCI Global vs. Huron Consulting Group |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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