Correlation Between Herc Holdings and FlexShopper
Can any of the company-specific risk be diversified away by investing in both Herc Holdings and FlexShopper 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 FlexShopper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herc Holdings and FlexShopper, you can compare the effects of market volatilities on Herc Holdings and FlexShopper 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 FlexShopper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and FlexShopper.
Diversification Opportunities for Herc Holdings and FlexShopper
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Herc and FlexShopper is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and FlexShopper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShopper 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 FlexShopper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShopper has no effect on the direction of Herc Holdings i.e., Herc Holdings and FlexShopper go up and down completely randomly.
Pair Corralation between Herc Holdings and FlexShopper
Considering the 90-day investment horizon Herc Holdings is expected to generate 1.77 times less return on investment than FlexShopper. But when comparing it to its historical volatility, Herc Holdings is 1.82 times less risky than FlexShopper. It trades about 0.04 of its potential returns per unit of risk. FlexShopper is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 112.00 in FlexShopper on November 2, 2024 and sell it today you would earn a total of 35.00 from holding FlexShopper or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Herc Holdings vs. FlexShopper
Performance |
| Timeline |
| Herc Holdings |
| FlexShopper |
Herc Holdings and FlexShopper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and FlexShopper
The main advantage of trading using opposite Herc Holdings and FlexShopper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings position performs unexpectedly, FlexShopper 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 FlexShopper will offset losses from the drop in FlexShopper'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 |
| FlexShopper vs. AZN Capital Corp | FlexShopper vs. Fortress Transportation and | FlexShopper vs. Ashtead Gro | FlexShopper vs. Alta Equipment Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |