Correlation Between Herc Holdings and Umpqua Holdings
Can any of the company-specific risk be diversified away by investing in both Herc Holdings and Umpqua 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 Umpqua 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 Umpqua Holdings, you can compare the effects of market volatilities on Herc Holdings and Umpqua 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 Umpqua Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and Umpqua Holdings.
Diversification Opportunities for Herc Holdings and Umpqua Holdings
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Herc and Umpqua is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and Umpqua Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Umpqua 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 Umpqua Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Umpqua Holdings has no effect on the direction of Herc Holdings i.e., Herc Holdings and Umpqua Holdings go up and down completely randomly.
Pair Corralation between Herc Holdings and Umpqua Holdings
Considering the 90-day investment horizon Herc Holdings is expected to generate 1.79 times more return on investment than Umpqua Holdings. However, Herc Holdings is 1.79 times more volatile than Umpqua Holdings. It trades about 0.05 of its potential returns per unit of risk. Umpqua Holdings is currently generating about 0.04 per unit of risk. If you would invest 12,684 in Herc Holdings on September 14, 2024 and sell it today you would earn a total of 8,179 from holding Herc Holdings or generate 64.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 9.11% |
| Values | Daily Returns |
Herc Holdings vs. Umpqua Holdings
Performance |
| Timeline |
| Herc Holdings |
| Umpqua Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Herc Holdings and Umpqua Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and Umpqua Holdings
The main advantage of trading using opposite Herc Holdings and Umpqua Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings position performs unexpectedly, Umpqua 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 Umpqua Holdings will offset losses from the drop in Umpqua 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 |
| Umpqua Holdings vs. Nexstar Broadcasting Group | Umpqua Holdings vs. Ihuman Inc | Umpqua Holdings vs. American Airlines Group | Umpqua Holdings vs. Saia 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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