Correlation Between Civeo Corp and Cintas

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

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

Diversification Opportunities for Civeo Corp and Cintas

-0.74

Correlation Coefficient

Civeo Corp  Cintas

Pay attention - limited upside

The 3 months correlation between Civeo and Cintas is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Civeo Corp and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Civeo Corp 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 Civeo 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 Civeo Corp i.e., Civeo Corp and Cintas go up and down completely randomly.

Pair Corralation between Civeo Corp and Cintas

Given the investment horizon of 90 days Civeo Corp is expected to under-perform the Cintas. In addition to that, Civeo Corp is 1.58 times more volatile than Cintas. It trades about -0.13 of its total potential returns per unit of risk. Cintas is currently generating about 0.17 per unit of volatility. If you would invest  19,949  in Cintas on September 2, 2024 and sell it today you would earn a total of  2,630  from holding Cintas or generate 13.18% return on investment over 90 days.

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

Civeo Corp  vs.  Cintas

Civeo Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Civeo Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Cintas

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cintas are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cintas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Civeo Corp and Cintas

The main advantage of trading using opposite Civeo Corp and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Civeo Corp 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 Civeo Corp 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.