Correlation Between Franklin Covey and Cintas
Can any of the company-specific risk be diversified away by investing in both Franklin Covey 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 Franklin Covey and Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Covey and Cintas, you can compare the effects of market volatilities on Franklin Covey 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 Franklin Covey with a short position of Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Covey and Cintas.
Diversification Opportunities for Franklin Covey and Cintas
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Cintas is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Franklin Covey 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 Franklin Covey 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 Franklin Covey i.e., Franklin Covey and Cintas go up and down completely randomly.
Pair Corralation between Franklin Covey and Cintas
Allowing for the 90-day total investment horizon Franklin Covey is expected to generate 3.48 times more return on investment than Cintas. However, Franklin Covey is 3.48 times more volatile than Cintas. It trades about 0.11 of its potential returns per unit of risk. Cintas is currently generating about -0.14 per unit of risk. If you would invest 3,760 in Franklin Covey on January 30, 2024 and sell it today you would earn a total of 194.00 from holding Franklin Covey or generate 5.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Franklin Covey vs. Cintas
Performance |
Timeline |
Franklin Covey |
Cintas |
Franklin Covey and Cintas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Covey and Cintas
The main advantage of trading using opposite Franklin Covey and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Covey 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.Franklin Covey vs. CRA International | Franklin Covey vs. Thermon Group Holdings | Franklin Covey vs. Forrester Research | Franklin Covey vs. Forestar Group |
Cintas vs. Avalon Holdings | Cintas vs. LanzaTech Global | Cintas vs. Ambipar Emergency Response | Cintas vs. Houston Natural Resources |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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