Correlation Between Hertz Global and Acumen Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Acumen Pharmaceuticals 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 Hertz Global and Acumen Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hertz Global Holdings and Acumen Pharmaceuticals, you can compare the effects of market volatilities on Hertz Global and Acumen Pharmaceuticals 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 Hertz Global with a short position of Acumen Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Acumen Pharmaceuticals.
Diversification Opportunities for Hertz Global and Acumen Pharmaceuticals
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hertz and Acumen is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Acumen Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acumen Pharmaceuticals and Hertz Global 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 Hertz Global Holdings are associated (or correlated) with Acumen Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acumen Pharmaceuticals has no effect on the direction of Hertz Global i.e., Hertz Global and Acumen Pharmaceuticals go up and down completely randomly.
Pair Corralation between Hertz Global and Acumen Pharmaceuticals
Considering the 90-day investment horizon Hertz Global Holdings is expected to generate 0.9 times more return on investment than Acumen Pharmaceuticals. However, Hertz Global Holdings is 1.11 times less risky than Acumen Pharmaceuticals. It trades about 0.3 of its potential returns per unit of risk. Acumen Pharmaceuticals is currently generating about -0.14 per unit of risk. If you would invest 306.00 in Hertz Global Holdings on August 27, 2024 and sell it today you would earn a total of 101.00 from holding Hertz Global Holdings or generate 33.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Holdings vs. Acumen Pharmaceuticals
Performance |
| Timeline |
| Hertz Global Holdings |
| Acumen Pharmaceuticals |
Hertz Global and Acumen Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Acumen Pharmaceuticals
The main advantage of trading using opposite Hertz Global and Acumen Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Acumen Pharmaceuticals 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 Acumen Pharmaceuticals will offset losses from the drop in Acumen Pharmaceuticals' long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
| Acumen Pharmaceuticals vs. Terns Pharmaceuticals | Acumen Pharmaceuticals vs. X4 Pharmaceuticals | Acumen Pharmaceuticals vs. Day One Biopharmaceuticals | Acumen Pharmaceuticals vs. Hookipa Pharma |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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