Correlation Between Cintas and Network 1

Can any of the company-specific risk be diversified away by investing in both Cintas and Network 1 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 Cintas and Network 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cintas and Network 1 Technologies, you can compare the effects of market volatilities on Cintas and Network 1 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 Cintas with a short position of Network 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and Network 1.

Diversification Opportunities for Cintas and Network 1

-0.08

Correlation Coefficient

Cintas  Network 1

Good diversification

The 3 months correlation between Cintas and Network is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and Network 1 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 1 Technologies and Cintas 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 Cintas are associated (or correlated) with Network 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network 1 Technologies has no effect on the direction of Cintas i.e., Cintas and Network 1 go up and down completely randomly.

Pair Corralation between Cintas and Network 1

Given the investment horizon of 90 days Cintas is expected to under-perform the Network 1. But the stock apears to be less risky and, when comparing its historical volatility, Cintas is 2.02 times less risky than Network 1. The stock trades about -0.01 of its potential returns per unit of risk. The Network 1 Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  124.00  in Network 1 Technologies on May 17, 2025 and sell it today you would earn a total of  18.00  from holding Network 1 Technologies or generate 14.52% return on investment over 90 days.

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

Cintas  vs.  Network 1 Technologies

Cintas

Risk-Adjusted Performance

Weakest

Over the last 90 days Cintas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cintas is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Network 1 Technologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Network 1 Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Network 1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cintas and Network 1

The main advantage of trading using opposite Cintas and Network 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, Network 1 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 Network 1 will offset losses from the drop in Network 1's long position.

The idea behind Cintas and Network 1 Technologies 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.