Correlation Between Cintas and Illinois Tool
Can any of the company-specific risk be diversified away by investing in both Cintas and Illinois Tool 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 Illinois Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cintas and Illinois Tool Works, you can compare the effects of market volatilities on Cintas and Illinois Tool 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 Illinois Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cintas and Illinois Tool.
Diversification Opportunities for Cintas and Illinois Tool
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cintas and Illinois is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Cintas and Illinois Tool Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illinois Tool Works 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 Illinois Tool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illinois Tool Works has no effect on the direction of Cintas i.e., Cintas and Illinois Tool go up and down completely randomly.
Pair Corralation between Cintas and Illinois Tool
Given the investment horizon of 90 days Cintas is expected to under-perform the Illinois Tool. In addition to that, Cintas is 1.05 times more volatile than Illinois Tool Works. It trades about -0.12 of its total potential returns per unit of risk. Illinois Tool Works is currently generating about -0.07 per unit of volatility. If you would invest 26,093 in Illinois Tool Works on September 10, 2025 and sell it today you would lose (1,280) from holding Illinois Tool Works or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cintas vs. Illinois Tool Works
Performance |
| Timeline |
| Cintas |
| Illinois Tool Works |
Cintas and Illinois Tool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cintas and Illinois Tool
The main advantage of trading using opposite Cintas and Illinois Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cintas position performs unexpectedly, Illinois Tool 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 Illinois Tool will offset losses from the drop in Illinois Tool's long position.| Cintas vs. Thomson Reuters | Cintas vs. Johnson Controls International | Cintas vs. Transdigm Group Incorporated | Cintas vs. Vertiv Holdings Co |
| Illinois Tool vs. Emerson Electric | Illinois Tool vs. Cummins | Illinois Tool vs. Howmet Aerospace | Illinois Tool vs. CSX Corporation |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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