Correlation Between Herc Holdings and CLST Holdings
Can any of the company-specific risk be diversified away by investing in both Herc Holdings and CLST 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 Herc Holdings and CLST Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herc Holdings and CLST Holdings, you can compare the effects of market volatilities on Herc Holdings and CLST 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 Herc Holdings with a short position of CLST Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and CLST Holdings.
Diversification Opportunities for Herc Holdings and CLST Holdings
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Herc and CLST is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and CLST Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLST Holdings 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 CLST Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLST Holdings has no effect on the direction of Herc Holdings i.e., Herc Holdings and CLST Holdings go up and down completely randomly.
Pair Corralation between Herc Holdings and CLST Holdings
Considering the 90-day investment horizon Herc Holdings is expected to generate 32.71 times less return on investment than CLST Holdings. But when comparing it to its historical volatility, Herc Holdings is 17.07 times less risky than CLST Holdings. It trades about 0.15 of its potential returns per unit of risk. CLST Holdings is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2.10 in CLST Holdings on November 4, 2024 and sell it today you would earn a total of 2.90 from holding CLST Holdings or generate 138.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Herc Holdings vs. CLST Holdings
Performance |
| Timeline |
| Herc Holdings |
| CLST Holdings |
Herc Holdings and CLST Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and CLST Holdings
The main advantage of trading using opposite Herc Holdings and CLST Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings position performs unexpectedly, CLST 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 CLST Holdings will offset losses from the drop in CLST Holdings' long position.| Herc Holdings vs. McGrath RentCorp | Herc Holdings vs. Alta Equipment Group | Herc Holdings vs. Custom Truck One | Herc Holdings vs. GATX Corporation |
| CLST Holdings vs. Direct Line Insurance | CLST Holdings vs. Sun Life Financial | CLST Holdings vs. Scholastic | CLST Holdings vs. Ihuman Inc |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |