Correlation Between Herc Holdings and Kuka AG
Can any of the company-specific risk be diversified away by investing in both Herc Holdings and Kuka AG 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 Kuka AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herc Holdings and Kuka AG ADR, you can compare the effects of market volatilities on Herc Holdings and Kuka AG 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 Kuka AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and Kuka AG.
Diversification Opportunities for Herc Holdings and Kuka AG
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Herc and Kuka is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and Kuka AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuka AG ADR 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 Kuka AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuka AG ADR has no effect on the direction of Herc Holdings i.e., Herc Holdings and Kuka AG go up and down completely randomly.
Pair Corralation between Herc Holdings and Kuka AG
If you would invest 7,800 in Kuka AG ADR on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Kuka AG ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Herc Holdings vs. Kuka AG ADR
Performance |
| Timeline |
| Herc Holdings |
| Kuka AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Herc Holdings and Kuka AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and Kuka AG
The main advantage of trading using opposite Herc Holdings and Kuka AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings position performs unexpectedly, Kuka AG 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 Kuka AG will offset losses from the drop in Kuka AG'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 |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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