Correlation Between Herc Holdings and Aarons
Can any of the company-specific risk be diversified away by investing in both Herc Holdings and Aarons 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 Herc Holdings and Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herc Holdings and The Aarons, you can compare the effects of market volatilities on Herc Holdings and Aarons 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 Herc Holdings with a short position of Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and Aarons.
Diversification Opportunities for Herc Holdings and Aarons
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Herc and Aarons is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons and Herc Holdings 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 Herc Holdings are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of Herc Holdings i.e., Herc Holdings and Aarons go up and down completely randomly.
Pair Corralation between Herc Holdings and Aarons
If you would invest 21,460 in Herc Holdings on August 28, 2024 and sell it today you would earn a total of 1,418 from holding Herc Holdings or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Herc Holdings vs. The Aarons
Performance |
| Timeline |
| Herc Holdings |
| Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Herc Holdings and Aarons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and Aarons
The main advantage of trading using opposite Herc Holdings and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings position performs unexpectedly, Aarons 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 Aarons will offset losses from the drop in Aarons' long position.| Herc Holdings vs. PROG Holdings | Herc Holdings vs. McGrath RentCorp | Herc Holdings vs. Mega Matrix Corp | Herc Holdings vs. FTAI Aviation Ltd |
| Aarons vs. Custom Truck One | Aarons vs. PROG Holdings | Aarons vs. McGrath RentCorp | Aarons vs. HE Equipment Services |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stocks Directory Find actively traded stocks across global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings 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 | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |