Correlation Between Hudson Pacific and Avis Budget
Can any of the company-specific risk be diversified away by investing in both Hudson Pacific and Avis Budget 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 Hudson Pacific and Avis Budget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Pacific Properties and Avis Budget Group, you can compare the effects of market volatilities on Hudson Pacific and Avis Budget 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 Hudson Pacific with a short position of Avis Budget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Pacific and Avis Budget.
Diversification Opportunities for Hudson Pacific and Avis Budget
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hudson and Avis is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Pacific Properties and Avis Budget Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avis Budget Group and Hudson Pacific 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 Hudson Pacific Properties are associated (or correlated) with Avis Budget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avis Budget Group has no effect on the direction of Hudson Pacific i.e., Hudson Pacific and Avis Budget go up and down completely randomly.
Pair Corralation between Hudson Pacific and Avis Budget
Considering the 90-day investment horizon Hudson Pacific Properties is expected to generate 0.88 times more return on investment than Avis Budget. However, Hudson Pacific Properties is 1.13 times less risky than Avis Budget. It trades about 0.1 of its potential returns per unit of risk. Avis Budget Group is currently generating about -0.2 per unit of risk. If you would invest 310.00 in Hudson Pacific Properties on December 1, 2024 and sell it today you would earn a total of 18.00 from holding Hudson Pacific Properties or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Pacific Properties vs. Avis Budget Group
Performance |
| Timeline |
| Hudson Pacific Properties |
| Avis Budget Group |
Hudson Pacific and Avis Budget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Pacific and Avis Budget
The main advantage of trading using opposite Hudson Pacific and Avis Budget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Pacific position performs unexpectedly, Avis Budget 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 Avis Budget will offset losses from the drop in Avis Budget's long position.| Hudson Pacific vs. Kilroy Realty Corp | Hudson Pacific vs. Highwoods Properties | Hudson Pacific vs. Cousins Properties Incorporated | Hudson Pacific vs. Piedmont Office Realty |
| Avis Budget vs. Hertz Global Hldgs | Avis Budget vs. Ryder System | Avis Budget vs. HE Equipment Services | Avis Budget vs. United Rentals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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