Correlation Between Herc Holdings and Weyco
Can any of the company-specific risk be diversified away by investing in both Herc Holdings and Weyco 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 Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herc Holdings and Weyco Group, you can compare the effects of market volatilities on Herc Holdings and Weyco 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 Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and Weyco.
Diversification Opportunities for Herc Holdings and Weyco
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Herc and Weyco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Herc Holdings i.e., Herc Holdings and Weyco go up and down completely randomly.
Pair Corralation between Herc Holdings and Weyco
Considering the 90-day investment horizon Herc Holdings is expected to generate 1.19 times more return on investment than Weyco. However, Herc Holdings is 1.19 times more volatile than Weyco Group. It trades about 0.11 of its potential returns per unit of risk. Weyco Group is currently generating about 0.05 per unit of risk. If you would invest 12,263 in Herc Holdings on September 3, 2024 and sell it today you would earn a total of 10,750 from holding Herc Holdings or generate 87.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Herc Holdings vs. Weyco Group
Performance |
| Timeline |
| Herc Holdings |
| Weyco Group |
Herc Holdings and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and Weyco
The main advantage of trading using opposite Herc Holdings and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco'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 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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