Correlation Between Herc Holdings and Flagstar Bancorp
Can any of the company-specific risk be diversified away by investing in both Herc Holdings and Flagstar Bancorp 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 Flagstar Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herc Holdings and Flagstar Bancorp, you can compare the effects of market volatilities on Herc Holdings and Flagstar Bancorp 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 Flagstar Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and Flagstar Bancorp.
Diversification Opportunities for Herc Holdings and Flagstar Bancorp
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Herc and Flagstar is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and Flagstar Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagstar Bancorp 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 Flagstar Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagstar Bancorp has no effect on the direction of Herc Holdings i.e., Herc Holdings and Flagstar Bancorp go up and down completely randomly.
Pair Corralation between Herc Holdings and Flagstar Bancorp
If you would invest 12,843 in Herc Holdings on September 3, 2024 and sell it today you would earn a total of 10,357 from holding Herc Holdings or generate 80.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.2% |
| Values | Daily Returns |
Herc Holdings vs. Flagstar Bancorp
Performance |
| Timeline |
| Herc Holdings |
| Flagstar Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Herc Holdings and Flagstar Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and Flagstar Bancorp
The main advantage of trading using opposite Herc Holdings and Flagstar Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings position performs unexpectedly, Flagstar Bancorp 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 Flagstar Bancorp will offset losses from the drop in Flagstar Bancorp's long position.| Herc Holdings vs. McGrath RentCorp | Herc Holdings vs. Alta Equipment Group | Herc Holdings vs. Custom Truck One | Herc Holdings vs. GATX Corporation |
| Flagstar Bancorp vs. Ironveld Plc | Flagstar Bancorp vs. Allegheny Technologies Incorporated | Flagstar Bancorp vs. Herc Holdings | Flagstar Bancorp vs. First Ship Lease |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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