Correlation Between Service International and Winmark

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

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

Diversification Opportunities for Service International and Winmark

-0.35

Correlation Coefficient

Service International  Winmark

Very good diversification

The 3 months correlation between Service and Winmark is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Service International and Winmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winmark and Service International 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 Service International are associated (or correlated) with Winmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winmark has no effect on the direction of Service International i.e., Service International and Winmark go up and down completely randomly.

Pair Corralation between Service International and Winmark

Considering the 90-day investment horizon Service International is expected to generate 0.47 times more return on investment than Winmark. However, Service International is 2.13 times less risky than Winmark. It trades about 0.06 of its potential returns per unit of risk. Winmark is currently generating about 0.02 per unit of risk. If you would invest  7,784  in Service International on May 17, 2025 and sell it today you would earn a total of  283.00  from holding Service International or generate 3.64% return on investment over 90 days.

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

Service International  vs.  Winmark

Service International

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Service International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Service International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Winmark

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Winmark are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Winmark is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Service International and Winmark

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

The idea behind Service International and Winmark 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.