Correlation Between Superior Plus and Cintas
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Cintas, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Cintas.
Diversification Opportunities for Superior Plus and Cintas
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and Cintas is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Cintas go up and down completely randomly.
Pair Corralation between Superior Plus and Cintas
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Cintas. In addition to that, Superior Plus is 2.15 times more volatile than Cintas. It trades about -0.03 of its total potential returns per unit of risk. Cintas is currently generating about 0.1 per unit of volatility. If you would invest 18,450 in Cintas on September 15, 2024 and sell it today you would earn a total of 1,710 from holding Cintas or generate 9.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Superior Plus Corp vs. Cintas
Performance |
Timeline |
Superior Plus Corp |
Cintas |
Superior Plus and Cintas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Superior Plus and Cintas
The main advantage of trading using opposite Superior Plus and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.Superior Plus vs. Nissan Chemical Corp | Superior Plus vs. Japan Medical Dynamic | Superior Plus vs. Sanyo Chemical Industries | Superior Plus vs. MeVis Medical Solutions |
Cintas vs. RELO GROUP INC | Cintas vs. Superior Plus Corp | Cintas vs. SIVERS SEMICONDUCTORS AB | Cintas vs. NorAm Drilling AS |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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