Correlation Between Herc Holdings and Uni President
Can any of the company-specific risk be diversified away by investing in both Herc Holdings and Uni President 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 Uni President into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herc Holdings and Uni President China Holdings, you can compare the effects of market volatilities on Herc Holdings and Uni President 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 Uni President. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and Uni President.
Diversification Opportunities for Herc Holdings and Uni President
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Herc and Uni is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and Uni President China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni President China 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 Uni President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni President China has no effect on the direction of Herc Holdings i.e., Herc Holdings and Uni President go up and down completely randomly.
Pair Corralation between Herc Holdings and Uni President
If you would invest 20,700 in Herc Holdings on September 3, 2024 and sell it today you would earn a total of 2,500 from holding Herc Holdings or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Herc Holdings vs. Uni President China Holdings
Performance |
| Timeline |
| Herc Holdings |
| Uni President China |
Herc Holdings and Uni President Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and Uni President
The main advantage of trading using opposite Herc Holdings and Uni President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings position performs unexpectedly, Uni President 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 Uni President will offset losses from the drop in Uni President'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 |
| Uni President vs. Verde Clean Fuels | Uni President vs. Herc Holdings | Uni President vs. Willscot Mobile Mini | Uni President vs. Tootsie Roll Industries |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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