Correlation Between BOC Aviation and Hertz Global
Can any of the company-specific risk be diversified away by investing in both BOC Aviation and Hertz Global 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 BOC Aviation and Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOC Aviation Limited and Hertz Global Holdings, you can compare the effects of market volatilities on BOC Aviation and Hertz Global 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 BOC Aviation with a short position of Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOC Aviation and Hertz Global.
Diversification Opportunities for BOC Aviation and Hertz Global
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between BOC and Hertz is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding BOC Aviation Limited and Hertz Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hertz Global Holdings and BOC Aviation 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 BOC Aviation Limited are associated (or correlated) with Hertz Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hertz Global Holdings has no effect on the direction of BOC Aviation i.e., BOC Aviation and Hertz Global go up and down completely randomly.
Pair Corralation between BOC Aviation and Hertz Global
Assuming the 90 days horizon BOC Aviation Limited is expected to generate 6.71 times more return on investment than Hertz Global. However, BOC Aviation is 6.71 times more volatile than Hertz Global Holdings. It trades about 0.1 of its potential returns per unit of risk. Hertz Global Holdings is currently generating about -0.05 per unit of risk. If you would invest 854.00 in BOC Aviation Limited on October 21, 2024 and sell it today you would lose (100.00) from holding BOC Aviation Limited or give up 11.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.94% |
| Values | Daily Returns |
BOC Aviation Limited vs. Hertz Global Holdings
Performance |
| Timeline |
| BOC Aviation Limited |
| Hertz Global Holdings |
BOC Aviation and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOC Aviation and Hertz Global
The main advantage of trading using opposite BOC Aviation and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOC Aviation position performs unexpectedly, Hertz Global 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 Hertz Global will offset losses from the drop in Hertz Global's long position.| BOC Aviation vs. Alta Equipment Group | BOC Aviation vs. Black Diamond Group | BOC Aviation vs. Ashtead Group plc | BOC Aviation vs. African Discovery Group |
| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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