Correlation Between BOS Better and Herc Holdings
Can any of the company-specific risk be diversified away by investing in both BOS Better and Herc Holdings 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 BOS Better and Herc Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOS Better Online and Herc Holdings, you can compare the effects of market volatilities on BOS Better and Herc Holdings 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 BOS Better with a short position of Herc Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and Herc Holdings.
Diversification Opportunities for BOS Better and Herc Holdings
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BOS and Herc is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and Herc Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herc Holdings and BOS Better 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 BOS Better Online are associated (or correlated) with Herc Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herc Holdings has no effect on the direction of BOS Better i.e., BOS Better and Herc Holdings go up and down completely randomly.
Pair Corralation between BOS Better and Herc Holdings
Given the investment horizon of 90 days BOS Better is expected to generate 1.11 times less return on investment than Herc Holdings. But when comparing it to its historical volatility, BOS Better Online is 1.12 times less risky than Herc Holdings. It trades about 0.05 of its potential returns per unit of risk. Herc Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14,454 in Herc Holdings on September 3, 2024 and sell it today you would earn a total of 8,746 from holding Herc Holdings or generate 60.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOS Better Online vs. Herc Holdings
Performance |
| Timeline |
| BOS Better Online |
| Herc Holdings |
BOS Better and Herc Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOS Better and Herc Holdings
The main advantage of trading using opposite BOS Better and Herc Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better position performs unexpectedly, Herc Holdings 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 Herc Holdings will offset losses from the drop in Herc Holdings' long position.| BOS Better vs. Highway Holdings Limited | BOS Better vs. QCR Holdings | BOS Better vs. Partner Communications | BOS Better vs. Acumen Pharmaceuticals |
| Herc Holdings vs. McGrath RentCorp | Herc Holdings vs. Alta Equipment Group | Herc Holdings vs. Custom Truck One | Herc Holdings vs. GATX 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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