Correlation Between Herc Holdings and Tsakos Energy
Can any of the company-specific risk be diversified away by investing in both Herc Holdings and Tsakos Energy 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 Tsakos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herc Holdings and Tsakos Energy Navigation, you can compare the effects of market volatilities on Herc Holdings and Tsakos Energy 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 Tsakos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and Tsakos Energy.
Diversification Opportunities for Herc Holdings and Tsakos Energy
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Herc and Tsakos is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and Tsakos Energy Navigation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsakos Energy Navigation 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 Tsakos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsakos Energy Navigation has no effect on the direction of Herc Holdings i.e., Herc Holdings and Tsakos Energy go up and down completely randomly.
Pair Corralation between Herc Holdings and Tsakos Energy
Considering the 90-day investment horizon Herc Holdings is expected to generate 1.44 times more return on investment than Tsakos Energy. However, Herc Holdings is 1.44 times more volatile than Tsakos Energy Navigation. It trades about 0.08 of its potential returns per unit of risk. Tsakos Energy Navigation is currently generating about -0.03 per unit of risk. If you would invest 15,717 in Herc Holdings on August 27, 2024 and sell it today you would earn a total of 6,575 from holding Herc Holdings or generate 41.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Herc Holdings vs. Tsakos Energy Navigation
Performance |
| Timeline |
| Herc Holdings |
| Tsakos Energy Navigation |
Herc Holdings and Tsakos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and Tsakos Energy
The main advantage of trading using opposite Herc Holdings and Tsakos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings position performs unexpectedly, Tsakos Energy 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 Tsakos Energy will offset losses from the drop in Tsakos Energy's long position.| Herc Holdings vs. PROG Holdings | Herc Holdings vs. McGrath RentCorp | Herc Holdings vs. Mega Matrix Corp | Herc Holdings vs. FTAI Aviation Ltd |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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