Correlation Between Citigroup and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hertz Global Hldgs, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hertz Global.
Diversification Opportunities for Citigroup and Hertz Global
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Hertz is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hertz Global Hldgs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hertz Global Hldgs and Citigroup 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 Citigroup 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 Hldgs has no effect on the direction of Citigroup i.e., Citigroup and Hertz Global go up and down completely randomly.
Pair Corralation between Citigroup and Hertz Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.09 times less return on investment than Hertz Global. But when comparing it to its historical volatility, Citigroup is 2.23 times less risky than Hertz Global. It trades about 0.25 of its potential returns per unit of risk. Hertz Global Hldgs is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 191.00 in Hertz Global Hldgs on August 27, 2024 and sell it today you would earn a total of 72.00 from holding Hertz Global Hldgs or generate 37.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Hertz Global Hldgs
Performance |
| Timeline |
| Citigroup |
| Hertz Global Hldgs |
Citigroup and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hertz Global
The main advantage of trading using opposite Citigroup and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Hertz Global vs. Hertz Global Holdings | Hertz Global vs. Avis Budget Group | Hertz Global vs. Herc Holdings | Hertz Global vs. Frontier Group Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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