Correlation Between Fortress Transportation and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Fortress Transportation 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 Fortress Transportation and Hertz Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transportation and and Hertz Global Hldgs, you can compare the effects of market volatilities on Fortress Transportation 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 Fortress Transportation with a short position of Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transportation and Hertz Global.
Diversification Opportunities for Fortress Transportation and Hertz Global
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fortress and Hertz is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transportation and 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 Fortress Transportation 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 Fortress Transportation and 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 Fortress Transportation i.e., Fortress Transportation and Hertz Global go up and down completely randomly.
Pair Corralation between Fortress Transportation and Hertz Global
Assuming the 90 days horizon Fortress Transportation is expected to generate 247.68 times less return on investment than Hertz Global. But when comparing it to its historical volatility, Fortress Transportation and is 286.85 times less risky than Hertz Global. It trades about 0.41 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 | Very Weak |
| Accuracy | 28.57% |
| Values | Daily Returns |
Fortress Transportation and vs. Hertz Global Hldgs
Performance |
| Timeline |
| Fortress Transportation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Hertz Global Hldgs |
Fortress Transportation and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Transportation and Hertz Global
The main advantage of trading using opposite Fortress Transportation and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transportation 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.| Fortress Transportation vs. Fortress Transportation and | Fortress Transportation vs. Fortress Transportation and | Fortress Transportation vs. Compass Diversified | Fortress Transportation vs. SiriusPoint |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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