Correlation Between Cintas and Genpact
Can any of the company-specific risk be diversified away by investing in both Cintas and Genpact 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 Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cintas and Genpact Limited, you can compare the effects of market volatilities on Cintas and Genpact 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 Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and Genpact.
Diversification Opportunities for Cintas and Genpact
Pay attention - limited upside
The 3 months correlation between Cintas and Genpact is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited 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 Genpact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genpact Limited has no effect on the direction of Cintas i.e., Cintas and Genpact go up and down completely randomly.
Pair Corralation between Cintas and Genpact
Given the investment horizon of 90 days Cintas is expected to generate 0.47 times more return on investment than Genpact. However, Cintas is 2.11 times less risky than Genpact. It trades about -0.03 of its potential returns per unit of risk. Genpact Limited is currently generating about -0.05 per unit of risk. If you would invest 67,742 in Cintas on February 6, 2024 and sell it today you would lose (338.00) from holding Cintas or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cintas vs. Genpact Limited
Performance |
| Timeline |
| Cintas |
| Genpact Limited |
Cintas and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cintas and Genpact
The main advantage of trading using opposite Cintas and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, Genpact 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 Genpact will offset losses from the drop in Genpact's long position.| Cintas vs. Steel Partners Holdings | Cintas vs. Compass Diversified | Cintas vs. Brookfield Business Partners | Cintas vs. Tejon Ranch Co |
| Genpact vs. ASGN Inc | Genpact vs. FiscalNote Holdings | Genpact vs. International Business Machines | Genpact vs. Aurora Innovation |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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